US retail giant Target has appointed Michael Fiddelke as its new chief executive, as the company grapples with falling sales and investor unease. Fiddelke, currently the chief operating officer, will take over from Brian Cornell in February. Cornell, who has led the company for a decade, had long been expected to retire.
The news prompted an instant response on Wall Street, as Target stock fell by almost 11% before bouncing back. Investors are keeping a close eye on whether the change of leadership will assist in reviving the struggling performance of the retailer.
Target has been under growing pressure from increasing prices, US tariffs uncertainty, and softer consumer spending, especially in non-essential categories such as apparel and electronics. The company has also been pinched by competition from Amazon and Walmart, both of which are aggressively expanding in e-commerce as well as bricks-and-mortar stores.
In May, the retailer cut its sales forecast after reporting quarterly sales fell 5.7%, attributing the decline to what it described as a "highly challenging environment." The slump followed criticism of Target after announcing it was reducing diversity, equity, and inclusion (DEI) efforts.
Fiddelke joined Target 20 years ago, and his hiring brings a return to the company's tradition of hiring from within for its top job. His predecessor, Cornell, was Target's first outside hire for CEO.
In a statement, Fiddelke recognized the work that needs to be done, noting Target has "work to do" and needs to "move faster, much faster." He vowed to prioritize enhancing product quality and speeding up the application of technology throughout the company.
Other analysts, though, wondered if an insider promotion will suffice to trigger a turnaround. Susannah Streeter of Hargreaves Lansdown wrote investors might have looked for "additional knowledge, insight and energy" with an outside appointment. Michael Baker of DA Davidson also commented that the move "doesn't have the pop" of a high-stakes outside hire.
Target is most famous for its cheap clothes, food, electronics, and homeware, but its flat share price has caused anxiety that it won't be able to keep up. Fiddelke's tenure will be watched carefully as he tries to revive growth and investor appetite in one of America's best-known retail brands.
