Target Needs to Fire CEO Brian Cornell

Target is among the worst dumpster fires in the retail industry over the past several years. Its board decided to raise the company’s dividend, which hardly offsets the mistakes made by Chair and CEO Brian C. Cornell. He has nearly ruined Target, and it will take a very long time for it to recover.

A recent Wall Street Journal article analyzed inventory to sales at America’s largest retailers. Target’s figures were particularly horrible.

Target’s stumbles managed to produce earnings that drove the stock down 25% when they were announced. This was described as the stock’s worst day since Black Money in 1987. Whether it was hyperbole or not, Target’s stock is down 33% in the past month. The S&P is up 3% over the same period. Shares of rival Walmart, which also posted poor earnings, have dropped 20% in the same period.

Inventory management is Retail 101. That Target missed the mark so badly is truly extraordinary. To burn off the excess inventory, it will need to drop prices on many items. The trouble will last for months.

Cornell has held his job since August 2014. If anyone should have a sense of inventory management, he should. Instead, he destroyed almost $30 billion of the retailer’s market value.

Boards have the job of protecting shareholder interests. Target’s board has several members with retail experience. They must know how poorly Cornell has run the company recently and that he needs to be replaced by someone who can do much better.

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