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March 5, 2014

Target seeks new technology head after data breach

NEW YORK — Target Corp., still reeling from a security breach that exposed the personal information of tens of millions of customers, is seeking a new top technology executive to help prevent future attacks.

The company is searching externally for a candidate to replace Beth Jacob, who resigned Wednesday after holding the chief information officer post since 2008. The new executive will help revamp Target's information-security and compliance operations, Chief Executive Officer Gregg Steinhafel said in an emailed statement. Promontory Financial Group will advise on the overhaul, he said.

Steinhafel has been working to regain customers' loyalty after hackers stole card data and personal information from millions of shoppers during the holiday season. While Jacob shouldn't be assigned all the blame for the breach, the company needs someone with more technology expertise in the position, said Brian Yarbrough, an analyst for Edward Jones & Co.

"They really want to elevate their game here to make sure this doesn't happen again," Yarbrough, who's based in St. Louis, said in a phone interview. "They're looking for someone with the appropriate background and experience."

Jacob joined Target's Dayton department-store division in 1984 as a buyer and left two years later, according to her profile on the retailer's website. She rejoined the company in 2002 as director of guest contact centers and was promoted to vice president of guest operations, in 2006. Jacob has an undergraduate degree in retail merchandising and an MBA, both from the University of Minnesota. She couldn't immediately be reached for comment.

Target also will elevate the position of chief information- security officer and hire externally for that job, Steinhafel said.

Jacob's resignation was reported earlier Wednesday by the Associated Press.

Target said in December that credit- and debit-card data of 40 million accounts was stolen during the holiday shopping season. In January, it said that names and addresses for as many as 70 million customers were taken as well. U.S. sales after the data theft were disclosed were "meaningfully weaker," the company said in January.

The retailer wasn't alone in having its systems attacked. Luxury department-store chain Neiman Marcus Group said in January that about 1.1 million credit cards may have been compromised in a data breach. Days later, arts-and-crafts retailer Michaels Stores said some customer payment-card data may have been used fraudulently. Sears Holdings Corp. said last month that it was reviewing its systems to see whether it had been the victim of a breach.

Sally Beauty Holdings Inc., which sells hair and beauty products, said Wednesday that it detected an attempted intrusion. The company said there is no evidence any consumer or credit- card data was lost and that it is investigating the situation.

Despite the widespread coverage of the breach, Target last month posted fourth-quarter profit of 81 cents a share, topping analysts' 79-cent average estimate. The retailer spent $61 million responding to the situation last quarter, including costs to investigate the incident and offer identity-theft services to customers. Insurance covered $44 million of the tab, leaving the company with an expense of $17 million in the period.

The expenses don't include potential claims by payment-card networks for counterfeit fraud losses.

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