Interesting week in the business world, especially concerning two of my previous employers, Target Corporation and Bank of America. Target announced this week that CEO Bob Ulrich is stepping down in May and will be replaced by longtime heir apparent Gregg Steinhafel, while B of A is in talks to take over Countrywide, a large mortgage lender that has been been hurt badly by the housing slump and the problems in the subprime market.
Ulrich has had a pretty successful tenure at Target, essentially transforming the company from a regional multi-line retailer into a formidable competitor in the discount store arena. Given Target's performance over the just-completed holiday season, it's probably as good a time as any for Ulrich to move on. I wonder what's going to happen to Steinhafel, though. He has a challenge on his hands from William Ackman, the activist investor who is agitating for Target to get rid of its credit card business. I'm not sure where I stand on this, but I suspect that Target needs to make some changes - it seems like they have been drifting for the last few years and they are now in a place that seems less hospitable for their fortunes: a discounter that relies too heavily on items that cannot be discounted easily.
B of A, on the other hand, looks pretty smart to me. Countrywide is in a lot of trouble right now, but the real value of the company is not in its management but in the many, many good loans they still have in their portfolio. Once completed, the move will put B of A in a good position to challenge their ancient rival Wells Fargo for superiority in the home mortgage market. And they are getting Countrywide at about as deep a discount as is possible.
No comments:
Post a Comment