Target still hasn’t recovered from the historically gargantuan data heist that hit its stores nationwide during last year’s holiday shopping season, as the company president and CEO announced Monday that he is stepping down effective immediately.
Gregg Steinhafel’s departure underscores how much the nation’s third-largest retailer has struggled in the five months since hackers compromised 40 million credit- and debit-card accounts and robbed 70 million customers of personal data, such as names, emails, and phone numbers.
In February, the company posted abysmal financial numbers, revealing fourth-quarter profits had sunk 46 percent over the previous year. Revenue also dropped by 5.3 percent. Yet perhaps most telling is that Target witnessed a 3.8 percent decline in sales, as customers were reticent to visit its stores during and after the holiday shopping season.
Target had anticipated that its numbers would be rough — and that it would be a long road to full recovery. In January, when the company announced that 70 million customers had personal information robbed, it suggested it would witness “meaningfully weaker-than-expected sales” in its fourth-quarter period that followed the data-breach disclosure on Dec. 19. Target also had announced then the closure of eight stores.
Steinhafel is now out despite making his company disclose more information than legally required after the breach and promising identity-theft insurance to millions of customers. He will continue to stay with Target in an advisory role as CFO John Mulligan takes over as interim president and CEO. The company said it was grateful for his “tireless leadership” during the months after the breach.
Target’s breach was the first of a number of massive-scale thefts revealed in recent months, which spurred Congress to hold a carousel of hearings that discussed options for better protecting consumer data. Some Democrats have pushed for a nationwide data-breach reporting system instead of the current state-by-state patchwork of laws that companies have said are confusing and difficult to navigate.
But amid worries from Republicans that such a step could grant too much authority to federal regulators, legislation has stalled.