OPERATIONS

Target names Gilt exec as VP of integration

BY Dan Berthiaume

Minneapolis – Peter Glusker has joined Target as senior VP, new business integration and operations, effective May 19. In this role, Glusker will lead the integration of new acquisitions into Target and develop strategies that ensure a consistent and great guest experience.

Glusker joins Target from Gilt Groupe, where he served as vice chairman and CEO of Gilt Groupe Japan. Previous roles at Gilt Groupe included head of business development and international operations. Prior to that, Mr. Glusker held digital media leadership roles with CBS Corporation and Viacom Inc.

“During the past year, Target has acquired companies including Chef’s Catalog, Cooking.com and DermStore, which complement and extend our assortment and content for guests,” said Casey Carl, president of multichannel, Target. “We’re excited to welcome Peter to Target, where he will focus on unlocking the full value of these and future strategic acquisitions.”

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FINANCE

Target cut Steinhafel compensation before termination

BY Dan Berthiaume

Minneapolis – Target Corp. cut the compensation of former CEO Gregg Steinhafel to $13 million in fiscal 2013 from $20.6 million in fiscal 2012. According to a regulatory filing, Target decided to reduce Steinhafel’s total compensation after holding meetings and calls with shareholders owning 40% of total company shares and two proxy advisory firms.

Steinhafel’s pay remained flat at $1.5 million and he received no bonus. He also did not receive option awards or non-equity incentive plan compensation, compared to a combined $8.13 million in the prior year. Other compensation was reduced to about $500,000 from $6 million, although his stock options were doubled to $10.2 million. Target decided to reduce Steinhafel’s compensation due to Target’s performance, which it said was hampered by a high-profile data breach and the company’s entry into Canada.

Target also acknowledged in the filing that Steinhafel was involuntarily terminated. Most other executives also did not receive a bonus, except CFO John Mulligan, who received a $150,000 bonus. Mulligan is serving as interim CEO while Target searches for a permanent replacement.

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FINANCE

Study: Brick-and-mortar sales down in 2014

BY Dan Berthiaume

San Jose, Calif. – Brick-and-mortar retail sales fell 8.8% from January to April 2014 compared to the same period a year earlier. RetailNext analysis of almost 59 million specialty and larger format retail stores within the continental U.S. also shows that store traffic fell 8.2%.

Other findings include that brick-and-mortar transactions fell 9.2%, and, sales per store slipped 0.8%. However, two positive developments were an average transaction value increase of 0.5% and a 0.81% decrease in returns.

"RetailNext has noted in past data published a decline in traffic numbers, which can result in a corresponding sales decline,” said Shelley E. Kohan, VP retail consulting, in-store analytics, Retail Next. “The customer today is making fewer trips to retail stores but we have found that once the customer lands at her favorite retailer, she will typically spend more money [higher spend Feb-Apr 1.4% up]. This can be attributed to two factors: Customers are making conscious choices about what products they want to buy online and which stores they want to visit to purchase product. The latter will normally have something to do with proximity and/or desire to shop in a particular retailer’s environment. Also, most customers have already done research on the product they are looking for prior to entering the brick-and-mortar environment, so there is higher probability of purchase and higher spend.

“Winning retailers understand these two factors and ensure that the retail environment they deliver is relevant to their customer and they have a golden opportunity to convert and upsell those committed customers that come into the store. If a customer has 10 things to purchase, he may buy seven online and select three retailers to ‘visit,’ so those three retailers need to make sure they deliver a shopping experience that meets or exceeds that customers’ expectation.

"The first quarter for fiscal 2014 has been a challenge for retailers with traffic down 6.5%. Conversion dropped slightly but had a significant impact on sales (-7.8%) when coupled with the traffic decline. Weather plays a role in these results with customers being less motivated to shop in inclement weather. And, the cooler temperatures play havoc with merchandise content in the stores because customers are not in the mindset for spring with unseasonable weather. April showed better results than previous months, but this is largely due to the shift of Easter from March to April. When the retail industry comes off a difficult fourth quarter, the first quarter has a tendency to follow suit. The second quarter should how more promising results."

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