For all of the impressive work experience on his CV, Brian Cornell’s most important attribute may be what he doesn’t have: a career at Target Corp.
When the PepsiCo Inc. executive takes over as the retailer’s next chief in two weeks, becoming the first outsider to ever lead it, he’ll have to shake up a cautious, bureaucratic culture in order to address challenges including e-commerce rivals and the grinding decline of the big-box store format.
That should be easier to do without the baggage of years inside the retailer that he’s trying to shake up. Cornell, 55, has in the past three decades worked for at least six different companies as diverse as warehouse clubs and orange-juice makers. By contrast, his Target predecessor Gregg Steinhafel had spent 35 years at the company.
“There is clearly an advantage in bringing in an outsider for the organisation to bring some fresher perspective to Target,” Arun Daniel, a senior fund manager at J O Hambro Capital Management in Boston, said in a phone interview. “There is no overnight fix for Target.”
Companies that have turned to outsiders have had mixed results in the recent past. Ford Motor Co. managed to avoid the bankruptcies and bailouts that befell its competitors after hiring Alan Mulally away from Boeing Co. The executive led the automaker to $42.3 billion in profit in the last five years before he stepped down last month.
Meanwhile, Ron Johnson attempted a transformation of J.C. Penney Co. that ended in disaster, shrinking the company’s sales back to where they were in the 1980s, after the department-store chain hired him from Apple Inc.
Consumer Goods
While he’s new to Minneapolis-based Target, Cornell has spent 30 years working for consumer-goods makers and the companies that sell them. His early positions were at Seagram Co. and then Tropicana and PepsiCo. In 2004, he moved over to retail, working as chief marketing officer for Safeway Inc. before becoming CEO of craft-goods seller Michaels Stores Inc. and then hopping to Wal-Mart Stores Inc. to run its Sam’s Club warehouse unit.
There he strengthened bonds with suppliers and instituted a digital couponing programme that helped results, David Strasser, an analyst Janney Capital Markets in New York, said in a note. Most importantly, sales rose 15 per cent during his tenure, outpacing the company’s overall 11-per-cent gain.
“Although Mr Cornell was not at Wal-Mart for a long time, during that period, we did get to know him and were impressed with where he was taking the division,” Strasser said. “During that period of time, Sam’s Club showed improvement.”
Cornell, who’ll also become chairman, will have plenty to improve upon at Target. Aside from fixing its Canadian operations, which lost $211 million before interest and taxes in the first quarter, he’ll have to get its bricks-and-mortar and online operations more in sync.
Bloomberg News, edited by ESM
