Target Proxy Battle Heats Up

William Ackman, leader of the investment firm Pershing Square Capital Management, introduced yesterday four executives he would like to see on Target’s board of directors. One of them is Jim Donald, a former Starbucks CEO who has also worked with grocer Pathmark and Wal-Mart.

“We think we can make this a better company if we improve the board,” Ackman said at a meeting in Manhattan, according to this article.

Ackman, who owns 7.8% of the retailer, voiced last year two major changes he would like to see take place at the discounter, the creation of a REIT for the land under its stores and the sale of its credit card business. After Target’s rejection of those proposals, he started his proxy battle.

Target has surely felt the recession and seen its market share go more toward Wal-Mart, which consumers perceive as having better deals in this tight economy. But is revamping the board and some of the ways Target does business the answer?


4 Responses to “Target Proxy Battle Heats Up”

  1. 1 Broker May 12, 2009 at 8:40 am

    Target needs Bill Ackman about as much as General Custer needed a few more Indians.

  2. 2 Fibrut May 12, 2009 at 11:06 am

    Hackman’s singular drive to increase shareholder value (looking after his own pocketbook) with no regard to what constitutes a great retail business represents the greed motivation that has fueled this economic crisis we’re in. I’m not blaming him alone for the entire crisis, but the motivation behind his push to destroy a great retail company for his own gain is deplorable.

  3. 3 Hicks May 13, 2009 at 8:58 am

    Target/Dayton-Hudson has always been a well run business. Recently Target’s traditional and well-deserved customer perception for affordable fashion plus lack of food and consumables mix have affected performance in this economic downcycle. That said, selling off collateral (real estate and proprietary credit)has caused permanent failure of many retailers that took this step in reaction to short-term oriented dissident shareholders. Further, reactionary changes to merchandise content, mix and diversification strategies rarely work as they affect established customer perceptions and direct management attention and capital from the core business. What Target and others need to do is plan, test and implement in the context of emerging demographic, psychographic and geographic trends and cycles.

  4. 4 TargetShopper May 13, 2009 at 9:40 am

    Mr. Ackman seems as reactionary as the Federal Government with their stimulus bill and may be enjoying the press he is getting.
    The choices for Target, or any mass merchandiser, appear to be: (1) Try to compete with Wal-Mart at selling to the masses of all socioeconomic groups; (2) Try not to be Wal-Mart and appeal to the somewhat smaller group willing and able to pay a little more for a cleaner store, more fasionable merchandise, less junk and fewer wierdos, (3) Go more toward a department store merchandise position (how is this working out for Kohl’s?) or (4) find a completely new concept. Please, please, please tell me you will not even think about option #1.

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