Target future uncertain following CFO retirement
MINNEAPOLIS — The unexpected announcement that Target EVP and CFO Doug Scovanner will retire on March 31, 2012 has investors speculating about the reasons for his departure following the recent exit of other key executives.
Analysts at Bernstein Research pointed to the fact that no successor has been named, suggesting that the retirement was not a long planned for event. However, the firm said it believes that despite the unexpected news, this appears to be a true retirement and doesn't anticipate seeing Scovanner in a CFO role at another major company.
Scovanner will remain in his current role for the next five months in order to ensure a smooth transition once his successor is named, the company said.
“Throughout his tenure with the company, Doug has been a valuable partner in developing and executing our strategy,” said Gregg Steinhafel, chairman, president and CEO. “He has made many significant contributions to Target, and as a result of his financial leadership, Target continues to deliver outstanding sales and earnings growth and generate superior returns for our shareholders. I am grateful that we will continue to benefit from his experience and expertise during this extended transition timeframe.”
Scovanner, 55, began his career at Dayton Hudson Corp., of which Target was a division of and in 2000 was renamed Target Corp., in February 1994 as SVP finance. He became CFO later that year and was named to his current role as EVP and CFO in 1999, making him one of the longest-serving CFO's at a Fortune 500 company. He currently serves as a member of the board of directors of TCF Financial Corporation a national financial holding company.
Before joining Target, Scovanner spent two years at The Fleming Companies in Oklahoma City, Oklahoma as SVP finance. Prior to that, he was with Coca-Cola Company and affiliates for 12 years, the last five years as VP and treasurer of Coca-Cola Enterprises.
“With Target’s strong core business and clear strategies for expansion, its prospects for continued profitable growth have never been brighter,” said Scovanner. “I feel extremely fortunate to have played a role in guiding the financial and strategic direction of this company over the years and I am committed to ensuring a seamless transfer of responsibilities to my successor.”
Though Scovanner's departure may have been a planned retirement, the timing is unfavorable for Target, which saw the departure last month of Steve Eastman, president Target.com, following the retailer's troubled website revamp, and the loss of Michael Francis, who as chief marketing officer was leading Target's entrance into Canada, to JCPenney.
According to Bernstein Research, Target has some work to do in filling the CFO role, but with a number of strong internal and external candidates likely seeking the role, the retailer should not have tough time finding a quality replacement for Scovanner.
CitiI analysts echoed those sentiments, and a report went as far as naming some potential candidates.
"We believe Target currently has two candidates within the company that are well-positioned to fill the spot: Corey Haaland, SVP, financial planning analysis and tax (11 years with Target); and John Mulligan, SVP, treasury and accounting (six years with Target.)"