Retail

Customers Are Sticking With Target

A recent Bloomberg poll suggests that most Target Corp. (NYSE: TGT) customers are willing to forgive the massive data breach that came to light over this past holiday season, perhaps seeing such incidents as a part of modern life.

The theft of data concerning more than 40 million payment transactions did hurt the company’s reputation, as evidenced by a drop in sales in the fourth quarter, as well as the congressional hearings and a flood of lawsuits. However, the poll taken in early May showed that 85% of customers expect to shop about the same amount at the stores over the next year. Only about 7% planned to reduce spending at Target in that period.

One in two customers said they were confident that Target could keep credit and debit-card information safe going forward, the survey found. Only 15% were “very confident” the retailer could do so.

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The survey also found that the company’s decision to oust CEO Gregg Steinhafel, who held himself personally accountable for the breach, had little effect on whether customers planned to shop at the stores. Some 84% said it made no difference to them.

CFO John Mulligan was named interim CEO on May 5, but Steinhafel will stay on as an adviser until Aug. 23, with the same base salary and benefits he had as CEO. The retailer is known for promoting from within but said it will also conduct an external search for a new chief executive.

Target shares are down 7.7% year to date and closed Monday at $58.29. They have traded in a range of $54.66 and $73.50 in the past year.

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