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Target’s Chief Exec Resigns

Minneapolis – Target chairman, president and CEO Gregg Steinhafel has resigned.

He will be succeeded on an interim basis by chief financial officer John Mulligan, and director Roxanne Austin was appointed interim non-executive chair by the board.

Steinhafel’s resignation, from both his post and the board, comes in the wake of the widespread breach of customer credit card data in December, which hobbled the chain’s holiday sales.

Target’s financial performance has also suffered in recent years — net earnings fell 34 percent in fiscal 2013 — and the company continues to play catch-up in e-commerce.

In his resignation letter to the board, Steinhafel, a 35-year veteran of the discount chain, acknowledged the challenges of the data breach, the recession and a difficult expansion into Canada. He also cited key accomplishments during his tenure as CEO, including the Redcard credit and debit program, the development of new store formats and the introduction of fresh food.

Steinhafel joined Target as a merchandise trainee in 1979 and was named president 20 years later. He succeeded Robert Ulrich as CEO six years ago this month.

In a statement, Target’s directors said that “after extensive discussions, the board and Gregg Steinhafel have decided that now is the right time for new leadership at Target. … The board is confident in the future of this company and views this transition as an opportunity to drive Target’s business forward and accelerate the company’s transformation efforts.”

Industry reaction was mixed. “The suddenness of this announcement is stunning … and the lack of planning around near-term transition leads us to believe that this was last minute,” observed Janney Montgomery Scott retail analyst David Strasser in a research note. “Target needs a turnaround specialist, someone who could re-energize a workforce that has been demoralized by bad news, and make tough and quick decisions regarding a variety of strategies that need review at the company … and it is critical that the board finds the right person.”

Target has retained executive search firm Korn Ferry to help fill the top spot.