Target CEO Steps Down in Wake of Data Breach Controversy

The Minneapolis-based retailer said the company veteran held himself 'personally accountable' for the preholiday disaster.

Customers push shopping carts in the parking lot of a Target store on May 22, 2013, in Novato, Calif.

Target CEO Gregg Steinhafel’s resignation comes in the wake of a security breach in which hackers obtained the personal information of 70 million shoppers.

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The chairman, president and chief executive officer of Target Corp. has stepped down following five months of corporate investigations and financial turmoil.

Effective immediately, Gregg Steinhafel’s resignation comes in the wake of controversy stemming from the retailer’s November data breach, which put customers on edge just before the critical holiday shopping season. Hackers obtained data from 40 million credit and debit cards and the personal information of 70 million shoppers between Nov. 27 and Dec, 15, the company said on its website.

“He held himself personally accountable and pledged that Target would emerge a better company,” the Minneapolis-based company’s board of directors said in a statement Monday.

[READ: Senate, Retailers Push Data-Theft Law]

The retailer spent $61 million in the fourth quarter to cover expenses related to the breach, including legal fees and increased staffing in its call centers, according to an annual financial report. In March, Target reported that its fourth-quarter net earnings were down 46 percent, and that sales declined 3.8 percent. More than 80 lawsuits have been filed in connection with the breach.

“Our top priority is taking care of you and helping you feel confident about shopping at Target, and it is our responsibility to protect your information when you shop with us,” Steinhafel wrote in a letter to customers in January. “We didn’t live up to that responsibility, and I am truly sorry.”

Target leadership came under further scrutiny after a report from the Senate Committee on Commerce, Science and Transportation found that the company may have failed to respond quickly enough after learning of the data hack.

The merchandiser hired Bob DeRodes in April to act as its new chief information officer and replace Beth Jacob, who resigned in March. 

[ALSO: Congress Pressures Target, Retailers on Data Security]

John Mulligan, Target’s chief financial officer, will act as interim president and chief executive officer until a permanent replacement is chosen, Target’s board of directors said in the statement. Roxanne Austin, a current member of the board of directors, will serve as the interim nonexecutive chair of the board.

Steinhafel, who has been with Target since 1979, assumed the company’s No. 1 position in 2008. The 59-year-old is a graduate of Carroll University and Northwestern University’s Kellogg School of Management.

Target, which sells a variety of home furnishings, groceries and clothing, operates 1,916 stores in the U.S. and Canada. The merchandiser will report first-quarter earnings on May 21.