MINNEAPOLIS (AP) – Target ( TGT ) plans to spend billions of dollars this year to reverse a persistent sales decline and regain its image as a fun place to shop for stylish clothing, home goods, beauty products and packaged foods at affordable prices.
The chief executive directing the turnaround plan is Michael Fedlak, who stepped into the chief executive role last month but has worked for Target for more than 20 years.
Fedlak, who previously served as chief operating officer, has stopped working for him. Some investors wanted an outsider to lead the company when Brian Cornell stepped down after more than 11 years as CEO. On Tuesday, the mass market retailer turned in another quarter of declining comparable sales. Target also faced pressure to take a public stance against the immigration crisis in Minneapolis, where the company is based.
During an interview with The Associated Press at the company’s headquarters, Fidlak talked about how he is trying to update stores and target merchandise selection, regain customer confidence and navigate a political and economic climate that has complicated the company’s problems. The interview has been edited for clarity and length.
Feedlock: Prove is the right word. This is a ‘proven’ story. I have the benefit of 23 years of running startups that have taught me a lot about how retail works. I have seen the target very well. I’ve seen us when we’re not at our best, and it makes for a real highlight for me when we’re hitting on all cylinders. This means being honest even on things that I had my fingerprints on. I was COO for two years. I was a CFO for some time which was great, and other times it wasn’t.
So as long as I can – and I believe I can – leverage this experience with a clear vision of where we are and where we need to change, I like the combination.
FIDDELKE: One of the things that’s important to being a design leader is you have to have an environment that really fosters creativity. And I think if you bring any customers into this discussion, they will say that the external stimulus is different, what I just saw, it often comes on trips to other markets. The Alpine Chalet you saw in our stores this past (fourth quarter) – was inspired by a European Christmas market trip. Where we lost it was during the pandemic. Travel was restricted for several years. We are now back to full form. It might take us a little longer than it should, but it’s all about creating the conditions for creativity.
Fedlak: I think history can be a guide to who we are at the core of who we are. This is different from nostalgia for nostalgia’s sake. And so there’s an important balance to keep in our heads where spending time in the archives, spending time talking to leaders who have led the cause in different chapters. All of these are useful. And you can’t just love nostalgia. A playbook from 10 years ago does not win in today’s retail.
Fedlak: I’ve been marked for 23 years. This has been true in virtually every one of those 23 years that Target has a deep history of being a profitable partner in the communities where our 2,000 stores operate. And our roots run deep there. Companies at our level give 5% of our operating profits back to the community. You don’t find many of these. And so understanding the core truths of who we are, our role in society, matters. Invest in team issues. The goal is to be together for everyone. The teams we build reflect the communities we serve, this is true for the guests in our stores, this is true for the partners who find space on our shelves.
Fedlak: As we went through last year, that was one of the things that affected our sales. And so we know we’ve earned the trust of the guests to win back, and we’re going to focus on doing that. There is no easy button to win back trust, but we will work.
Fedlak: When I think about navigating the start of the year here, especially in our hometown in Minneapolis, the thing that we’ve kept front and center every day is the safety of our team. And so the safety of the team and the safety of our guests is our north star for decision making, and it guides every decision we make.
FIDDELKE: Even during the last year, even at the end of the year, we saw business that was, broadly speaking, from where we expected it to be. And so, I am not satisfied with our performance as a whole. I won’t call any specific sub-groups into this.
FIDDELKE: I think we are an emotional brand. We are a brand that people love. And the thing I can say is that we hold ourselves to a high standard in the product that shows up on our shelves and the experience that we create and the way that we show up in the community. So I can’t speak for everyone, but we know where we’re going to focus.
FIDDELKE: The best thing for us is always to focus on a clear strategy. Control what we can control. I think in the last few years, there has been a lot of volatility in the environment to manage. There’s a lot we can’t control—it comes in buckets, whether it’s a global pandemic or it’s changes in policy. And so the right thing for us to do is to be laser-focused on how we can be the best we can be for all the families and guests who depend on us every day.
Fidlak: If I can describe what I hear from the team, it’s a team that is hungry to win. There is a lot of pride in the goal and a lot of passion to get this company back to growth. And I think as I am not satisfied with our performance in the last few years, a team will tell you the same.
