Target overhaul continues as senior executive steps down

Updated 4:45 p.m. | Posted 12:14 p.m.

In the latest shake-up at Target, the retailer's chief merchandising and supply chain officer is leaving the company.

Kathryn Tesija, who also serves as executive vice president, will shift to a temporary role as strategic adviser and plans to leave the company in April 2016, Target said in a regulatory filing on Thursday.

As head of merchandising and supplies, she had perhaps more influence than any other executive over the experience of customers at Target stores.

The company indicated the parting is amicable. Her exit, though, shows the executive suite is not off limits from CEO Brian Cornell's effort to reinvigorate the Minneapolis-based retail giant.

Since taking over in August, Cornell has withdrawn Target from Canada, sold its pharmacy business and laid off thousands of employees. Target intends to eliminate $2 billion in spending over the next two years.

Cornell has said he wants Target to be a leader in fashion, clothing, home, beauty, babies, children and wellness.

Back in March, he said he was pleased with the executive team he inherited.

"I've been asked time and time again, 'Do we have the right team in place?" And I will tell you, 'Absolutely, we have the right team in place,'" he said then.

On Thursday, he praised Tesija, a nearly 30-year Target veteran, for her merchandising skills, leadership and role in Target's success.

But Cornell said he and Tesija have had many discussions about the business and together decided it's the right time for her to move to an advisory role. She'll be eligible for severance payments but would be subject to a non-competition agreement.

Tesija once appeared to be in Cornell's good graces, said Brian Yarbrough, an analyst who follows Target for the investment firm Edward Jones.

"With all the applause he's been giving her and her team and the improved sales trends they've been seeing over the last few quarters, I am kind of shocked a little bit by the timing," he said.

Target isn't offering any clues about Tesija's exit. A company spkeswoman wouldn't say if Cornell wanted Tesija to stay. And she said Tesija was not available for interviews.

Tesija oversaw product design and development, sourcing, inventory management, merchandising, presentation, operations and the company's global supply chain.

"Her sensibility was a major factor shaping Target's image. There's going to be a void there," said Yarbrough, who suspects Tesija could have left because she may have wanted to lead the company and didn't see that happening.

It's possible they had clashing visions for the company's future or for her own. But some analysts say it would have been more surprising if there was no turnover in the executive suite.

"They're new and they want to put a team in that's consistent with what they want to do," said retail consultant Howard Davidowitz, who noted Target competitor Walmart has gone through similar changes under second-year CEO Doug McMillon.

"Everyone is accountable," Davidowitz said.