Target CEO Says He Is Sorry About Security Breach
In an interview with CNBC on Monday, Target Corp. (NYSE:TGT) CEO Gregg Steinhafel assured that Target is in the process of making “significant changes” to its operations after a huge security breach that has left the information of 70 million Target customers vulnerable.
On Friday, Target released an update about the breach, which first came to light on December 19 and hit the retailer in the middle of the crucial holiday shopping season. In the announcement, Target increased the number of customers it believes were affected by the massive hack. It was already confirmed that the credit card information of 40 million customers had been compromised. On Friday, Target said that 70 million names, mailing addresses, phone numbers, or email addresses were stolen as well.
“Clearly, we’re accountable and we’re responsible. But we’re going to come out at the end of this a better company. And we’re going to make significant changes,” Steinhafel told CNBC, without elaborating on what exactly those changes would be. “I’m personally very sorry that this whole event even happened.” When asked if the retailer is expecting to announce an even higher figure for the number of people whose information was compromised as the investigation continues, Steinhafel said, “We’re very confident that our safe — that our environment is safe and secure. And we have no evidence that there’s any other guest information that — was removed from our — environment.”
Steinhafel also reiterated his vow that Target will be held completely accountable for any fraudulent activity related to the security breach. “It’s been a challenging time at Target. But throughout this period, there has been a singular focus on doing the right thing for our guest. And, so, we want them to know there’s zero liability on their part and we’re offering free credit monitoring to any guest that wants an additional peace of mind,” Steinhafel said.
Investors aren’t getting the same piece of mind or reassurance from the retailer that customers are. Target’s holiday sales slumped in the face of the scandal, and the store has lowered its guidance for earnings during the fourth quarter of 2013 by 2.5 percent. Steinhafel said it wasn’t yet clear the amount Target will have to pay for the fraudulent charges, something that obviously has investors worried. He did say that the store’s best plan for moving forward is to make sure its customers that were affected are taken care of in such a way that they will return to being Target shoppers.
“That is the priority, is to win back those shoppers, invest in them, and make sure that we can rebuild the relationship and the trust that they — that we want them to have in Target,” Steinhafel said.
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