Target has a problem (it's coming from inside the building)

Few people leave the stage at the right time and Brian Cornell may have overstayed his welcome as Target CEO. When he was hired in 2014 as the company's first-ever outside pick for CEO, Target (TGT) was a bit of a mess.

Target was in crisis mode after a series of major stumbles:

2013 data breach that exposed 40 million credit cards and hurt consumer trust.
Failed Canada expansion (2013–2015), which left the company billions in the red.
Leadership turmoil: His predecessor, Gregg Steinhafel, resigned in May 2014 under pressure from the board.

It was an ugly period and Cornell quickly righted the ship. He shut down the company's Canadian business in order to focus on the United States and he began making investment to both improve the in-store experience and to keep up with Amazon and Walmart despite lacking their resources.

Cornell was even named CNN's Top CEO in 2019 and he seemingly had the company back on track.

Cornell did a very good job improving Target's shipping.

Image source: Sundry Photography/Getty Images

Target made smart investments

Cornell traced his success back to 2017 when he unveiled a plan that was heavy on brick-and-mortar investment.

“The decision was not well-received at the time. The ‘retail-is-dead’ narrative was in full effect, and we were making one of the largest investments in our history. But we knew that, over time, we would demonstrate we were doing the right thing for our guests, our business and our team,” he told CNN.

About a year later, the chain reported its best results in a decade.

That success continued until a relatively recent series of missteps.

Brian Cornell Target Successes

2017: $7 billion investment in remodels, wages, supply chain.
2017-19: Store traffic returns to growth after years of decline.
2019: Target’s same-day services (Drive Up, Shipt, Order Pickup) scale nationwide.
2020: Pandemic boom: sales surge, $15 billion growth in a year.
2020-21: Digital sales triple in three years.
2021: Owned brands (Cat & Jack, Good & Gather) hit billions in sales.
2023: Target ranks among top 10 U.S. e-commerce retailers.
2024: Loyalty program Target Circle surpasses 100M members.

You can argue that buying Shipt for $550 million was Cornell's best move. It allowed the chain to build out same-day delivery services for a fraction of what Walmart and Amazon had to spend to do the same thing.

Target's Cornell made mistakes with customers

Cornell's largest mistake has been that he has not made Target a place that's welcoming to everyone while also celebrating diversity. He backed down countless times when faced with scandals that were essentially attempts to gaslight the brand.

That included a 2016 scandal where the company faced controversy over its decision to allow customers to use the bathroom of the gender they identified as. Target went a step further and added a solo bathroom so no customer would have to share a bathroom with someone they found objectionable.

As he would later do with the chain's Pride collection and its diversity, equity, and inclusion (DEI) programs, Cornell made concessions that alienated the brand's core audience.

Target, in the DEI case, was clearly trying to appease President Donald Trump.

Experts think Target stumbled

Eric Schiffer of Los Angeles-based Reputation Management Consultants, had strong words for Target on the move.

“For Target, with an inclusive audience, this is their version of brand suicide,” he told Reuters.

Sarah Kate Ellis, president and CEO of LGBTQ advocacy group GLAAD, told MarketWatch she was not surprised by the consumer reaction to Target’s DEI move.

“With the LGBTQ community wielding $1.4 trillion in spending power, and the fastest growing consumer segments being Black, Latine, and younger consumers, it’s no surprise that Target’s bottom line is down,” she said in a statement. “Other companies must take note: Prices and value are one thing, but to grow your business, you need to look at your values.”

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He realized his mistake and tried to address it an email to employees.

“I recognize that silence from us has created uncertainty, so I want to be very clear: We are still the Target you know and believe in,” said Cornell in the email.

The CEO also emphasized that Target’s values of “inclusivity, connection, drive” are “not up for debate” and said that the company is “committed” to sharing how its values create an impact,” reported TheStreet's Patricia Battle.

“The world around us is noisier and more complicated, but that doesn’t change who we are,” added Cornell.

Except, companies get judged by actions, not emails, and many of Cornell's actions did not support the diverse audience that makes up Target's core.

Brian Cornell Target Missteps Timeline

2016: Bathroom policy sparks boycott, sales drop.
2022: Inventory glut, billions lost in markdowns.
2023: Pride backlash, boycotts hit sales.
2024-25: Foot traffic declines, Walmart gains share.
2025: Target scales back its DEI efforts.

As Cornell plans to retire this year, many believe he should be replaced by someone from outside the company.

“With the slew of challenges it faces, Target would benefit from an experienced outside hire. New ‘best practices’ are needed, as the well-worn Target play book is no longer resonating with customers. Just as they turned to Brian C a decade ago, bringing in his experience from Sam’s Club and Pepsi, a new external veteran of the industry is who they need now,” longtime retail industry executive Frank Margolis told RetailWire.

Cornell himself understands that Target has work to do.

“I want to be clear that we're not satisfied with this performance, and we're moving with urgency to navigate through this period of volatility. Throughout our operations, we're focused on consistency and reliability with an emphasis on retail fundamentals and delivering a superior guest experience that features newness, differentiation and value,” he shared during its first-quarter earnings call,” he said.