Retailer still feeling the pain of holiday data breach
A full five months after its enormous data breach, Target is still scrambling for ways to convince shoppers to come back. The big red retailer’s latest move was to give CEO Gregg Steinhafel the boot, allegedly to bring in new leadership that will, “help restore consumer confidence”, but so far all the move has done is spook investors.
Reuters reporters spoke with several financial analysts, and all had grim outlooks on Target’s situation:
“You got to wonder what prompted it now. What else will come to light,” said Dieter Waizenegger, executive director, of CtW Investment Group, which advises union pension funds with about $250 billion under management, including those owning about 3.3 million Target shares.
“We would hazard a guess that first-quarter sales continued to be hurt by the data breach aftermath and that the Canada expansion is still in trouble,” Carol Levenson, an analyst with bond researcher Gimme Credit, said in a report.
“We believe this to be a very inopportune time for a change at the top of Target, given the challenges the company is facing on multiple fronts,” Moody’s [Investors Service] Vice President Charles O’Shea said.
Any dip of this magnitude is bound to take time to climb out of, even when everything is done properly. Between the stumbles with external crisis management and what comes across as difficulty keeping things together internally, Target has a long road ahead.
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]