ATLANTA (Reuters) - Target Corp (TGT.N) said on Wednesday that Bob Ulrich would retire as the discount retailer’s chief executive as of May 1 and remain chairman through the end of the 2008 fiscal year.
Ulrich, who will reach the company’s mandatory retirement age of 65 in April, will be succeeded as CEO by President Gregg Steinhafel, a 28-year Target veteran.
“It’s a very natural progression and totally expected and shouldn’t really change anything,” said Patricia Edwards, a Seattle-based portfolio manager at investment management firm Wentworth, Hauser and Violich.
Edwards said she met Target management in late August and remembers Ulrich commenting that he wouldn’t be with the company forever.
“It was obvious to me that this announcement was coming within the next year,” she added.
The No. 2 U.S. discounter behind Wal-Mart Stores Inc (WMT.N) is trying to boost sales as middle-income U.S. shoppers grapple with rising gasoline costs and a crumbling housing market.
Last month, Target cut its expectation for December sales at stores open at least a year, warning that they would fall short of levels needed to achieve fourth-quarter per-share earnings growth. The company will release December same-store sales on Thursday, and analysts expect a decline of 4.9 percent, according to Reuters Estimates.
Edwards said Target has been hurt as middle-income consumers were hit by the U.S. downturn and added that the chain’s holiday ads were not as effective amid competition from other retailers, particularly Macy’s Inc (M.N), which launched a host of promotions to drive traffic.
But Edwards added that Steinhafel and other Target officials “are great merchants and I think they will right the ship pretty quick.”
Ulrich began his career as a trainee in 1967 at Dayton’s, a former Target division, and worked his way up. He became CEO and chairman of Target in 1994.
Edward Weller, an analyst with ThinkEquity Partners LLC, said in a research note that Ulrich “was a real visionary in seeing what could make Target into a cost-competitive and desirable alternative to the industry’s 300-pound gorilla.”
Steinhafel, 52, joined Target in 1979 and was promoted to president in 1999.
Target shares eased to $49.75 in extended trading on Wednesday from their $49.92 close on the New York Stock Exchange.
Reporting by Karen Jacobs; Editing by Braden Reddall