Tags: new | leadership | target | TGT

New Leadership to Keep Target On Track

By    |   Monday, 06 Feb 2012 08:09 AM

Expected strong sales for Target’s (TGT) fiscal 2011 fourth quarter has paved the way for a smooth transition for an incoming chief financial officer, whose main leadership challenge will be to keep the company on track during continuing economic weakness.

The current CFO announced his retirement in November, effective March 31, and, after an exhaustive search for his replacement both inside and outside of the company, Target’s senior vice president for finance, John Mulligan, was promoted to the position.

He’ll hit the ground running. Later in the year, Mulligan will be charged with finalizing the sale of the company’s credit card receivables portfolio, which had been put on hold at the beginning of 2012. The sale started in early 2011.

At the time the decision to postpone the sale was announced, the company said it would retire its 2008 receivables financing provided by Chase Card Services prior to its expected payoff in late 2013, at a cost of $2.8 billion.

Though retiring the financing early will cost roughly 8 cents of the fourth quarter earnings per share, currently seen at between $1.43 and $1.53, the company expects to recoup that loss in saved interest payments throughout 2012 and 2013.

In addition, doing so better positions the company to sell its entire credit card portfolio with Mulligan at its head.

Canada deal


Meanwhile, Target has reached an agreement with Fairweather, a company marketing apparel in Canada since 1981 under the name Target Apparel. 

As Target plans to enter the Canadian market in 2013, it filed a trademark infringement procedure in 2010, but Fairweather countered with a $250 million suit.

The suit had been scheduled to go to court this year, but instead an agreement for an undisclosed amount has been reached, with Fairweather ceasing to market using the Target name by Jan. 31, 2013.

UBS recently initiated coverage of TGT with a buy rating. The company next reports earnings on Feb. 23.

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2012-09-06
Monday, 06 Feb 2012 08:09 AM
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