Business

How Target let Walmart steal its rizz

Published

4 months ago

August 21, 2025

Good morning. When Brian Cornell took the reins at Target 11 years ago, the retailer was, to put it mildly, a mess. Among its many problems: Target was struggling with out-of-stocks that frustrated shoppers, employee morale was low, and there was a sense that the retailer had lost much of the “Tar-zhay” cheap-chic magic that had won it millions of loyal, fanatical shoppers for decades.

So it’s disappointing for fans to see that same shopping list of problems plaguing Target again. Sales have been in decline for three years now, and the stock has plunged 64% from its all-time high in 2022.

It didn’t have to be this way. At the start of his tenure, Cornell, who the company announced yesterday will step down as CEO on February 1, was an outsider unafraid to move fast and break things. He had been CEO of a big PepsiCo unit, Michaels Stores, and Sam’s Club before that.

As I detailed in a 2015 cover story, he quickly ended Target’s ill-advised Canada expansion to focus without distraction on a struggling U.S. business, assembled an A-team of merchants to re-energize Target’s store brands (for a while, Target was launching billion-dollar brands on a monthly basis) and changed Target’s insular culture.

And in March 2017, in perhaps his boldest move, he announced a $7 billion multi-year program to remodel its physical stores, making them more inviting but also equipping them to support e-commerce pick up and delivery at a time investing in physical stores was seen as folly given Amazon’s ascendance.

Wall Street pummeled the stock but Cornell had the last laugh. Target soared for years, building a huge digital business, and taking market share from department stores. It was also well-positioned with its curbside pickup and improved grocery when the pandemic struck to be one of retail’s big winners alongside Walmart and Costco. Indeed, sales rose 20% in 2020 and the following year, revenue passed $100 billion for the first time.

By that point, Cornell had been in the post for eight years, roughly the average tenure of a Fortune 500 CEO. But rather than hand on the baton, he signed on for another three years through 2025. Unfortunately, inertia set in. Shoppers felt Target lost its edge. Millions defected. Meanwhile, Walmart swooped in to take market share with its suddenly hipper apparel and home goods offerings. (The whole contretemps around DEI was also an unforced error that hurt morale.)

Cornell had a great run overall, but like many CEOs seems to have misjudged the moment when it’s time to move on. (And he’s not really going away– he will stay on as executive chairman indefinitely.) Though Wall Street had been hoping for an outsider to take the reins, Target’s former COO Michael Fiddelke got the nod. He’ll have his work cut out for him. But perhaps the lesson here is, even successful CEOs have a shelf life.—Phil Wahba

Top news

The Fed is more concerned about inflation than jobs

U.S. Federal Reserve officials were more concerned about the inflationary impact of President Trump’s trade tariffs than signs of weakness in the job market, according to the minutes of their last meeting. The Fed meets at Jackson Hole today. Chair Jerome Powell will make a closely watched speech on Friday.

Fed governor accused of mortgage fraud

Federal Reserve governor Lisa Cook was accused of mortgage fraud and referred for criminal prosecution by Federal housing regulator Bill Pulte. He said she “has falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statutes.” Cook is accused of taking out loans on properties in Michigan and Atlanta and claiming that both were her principal residence. Context: The Trump administration is trying to end the Fed’s economic independence and bring it under political control. Powell has also been referred for a criminal probe, baselessly, over his remarks to Congress.

Meta reorganizes its “superintelligence” unit

Meta is doubling down on its so-called race to “superintelligence,” reshuffling its AI organization once more as its new Meta Superintelligence Labs group takes shape. But analysts say investors are keeping their eye on the prize Meta has always promised: improved products that increase engagement and, in turn, sell more ads. Superintelligent AI models, if they arrive, are just a means to that end. former Scale AI CEO Alexandr Wang is leading the reorganization.

China moved against Nvidia after “insulting” remarks from Lutnick

Regulators in China moved to restrict companies from buying Nvidia chips after they felt insulted by remarks on CNBC by U.S. commerce secretary Howard Lutnick, the FT reports. “We don’t sell them our best stuff, not our second-best stuff, not even our third-best,” Lutnick said in July 15. “You want to sell the Chinese enough that their developers get addicted to the American technology stack, that’s the thinking.”

Bed Bath & Beyond blasts California

Bed Bath & Beyond won’t open stores in California because the state “has created one of the most overregulated, expensive and risky environments for businesses in America,” executive chairman Marcus Lemonis said in a statement. The chain went bankrupt in 2023 and closed all its stores but is attempting a comeback under Kirkland’s Inc. It has opened one new store in Nashville. California officials were unfazed by Lemonis’s criticism. “Like most Americans, we thought Bed Bath & Beyond no longer existed,” the governor’s spokesperson said.

The tide shifts in the labor market

Managers offered up significant raises to keep employees around during the Great Resignation in the aftermath of the pandemic. Now they’re taking the power back with return-to-office policies and pay cuts.

‘Bubble’ worries hit Big Tech stocks

Big Tech stocks fell sharply on Tuesday amid concerns of a potential AI bubble after a new MIT report found that nearly 95% of corporate generative AI pilot programs had “little to no” profit or revenue upside. Experts who spoke to Fortune, however, say this correction is expected and not necessarily indicative of a bubble.

Sony raises console prices due to tariffs

Sony announced that it will raise the price of its PlayStation 5 consoles to adjust for the Trump Administration’s tariffs on electronics made in China. The company joins Microsoft and Nintendo, which have made similar price increases on their consoles this year.

We’re not going to see those Epstein docs

A federal court has ruled for a second time that transcripts and exhibits from the grand jury probe of Jeffrey Epstein will not be released because there are not “any special circumstances” to justify the move.

The markets

S&P 500 futures were flat this morning, premarket, after the index closed down 0.24% yesterday. STOXX Europe 600 was down 0.1% in early trading. The U.K.’s FTSE 100 was flat in early trading. Japan’s Nikkei 225 was down 0.65%. China’s CSI 300 was up 0.39%. The South Korea KOSPI was up 0.37%. India’s Nifty 50 was up 0.29% before the end of the session. Bitcoin fell to $113.8K.

Around the watercooler

Tesla shareholder group urges probe, ‘appropriate remedial action’ from Nasdaq over Elon Musk’s $29 billion pay package by Nick Lichtenberg

Billionaire Epic CEO Judy Faulkner built her $5.7 billion-a-year software firm in a basement. She says not getting an MBA was a ‘really good thing’ by Preston Fore

Trump may want lower interest rates for consumers, but it sure is convenient for the national debt he’s creating, too by Eleanor Pringle

Cape Cod is considering taxing luxury home sales of $2+ million to raise funds for the housing market’s ‘missing middle’ by Sydney Lake

CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.

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Business

Creative workers won’t be replaced by AI, they will become ‘directors’ managing AI agents

Published

1 hour ago

December 12, 2025

Jace Porter

AI won’t automate creative jobs—but the way workers do them is about to change fundamentally. That’s according to executives from some of the world’s largest enterprise companies who spoke at the Fortune Brainstorm AI conference in San Francisco earlier this week.

“Most of us are producers today,” Nancy Xu, vice president of AI and Agentforce at Salesforce, told the audience. “Most of what we do is we take some objective and we say, ‘Okay, my goal is now to spend the next eight hours today to figure out how to chase after this customer, or increase my CSAT score, or to close this amount of revenue.”

With AI agents handling more tasks, Xu said that workers will shift “from producers to more directors.” Instead of asking, “How do I accomplish the goal?” they’ll instead focus on, “What are the goals that I want to accomplish, and then how do I delegate those goals to AI?” she said.

Creative and sales professionals are increasingly anxious about AI automation as tools like chatbots and AI image generators have proved to be good at doing many creative tasks in sectors like marketing, customer service, and graphic design. Companies are already deploying AI agents to take on tasks like handling customer questions, generating marketing content, and assisting with sales outreach.

Pointing to a recent project with electric-vehicle maker Rivian, Elisabeth Zornes, chief customer officer at Autodesk, said that the company’s AI-powered tools enabled Rivian to test designs through digital wind tunnels rather than clay models. “It shaved off about two years of their development cycle,” Zornes said.

As AI takes on some of these lower-level tasks, Zornes said, workers can focus on more creative projects.

“With AI, the floor has been raised, but so has the ceiling,” she added. “We have an opportunity to create more, to be more imaginative.”

The uneven impact of AI

The shift to AI-augmented work may not benefit all workers equally, however.

Salesforce’s Xu said AI’s impact won’t be evenly distributed between high and low performers. “The near-term impact of AI will largely be that we’re going to take the bottom 50 percentile performers inside a role and bring them into the top 50 percentile,” she said. “If you’re in the top 10 percentile, the superstar salespeople, creatives, the impact of AI is actually much less.”

While leaders were keen to emphasize that AI will augment, rather than replace, creative workers, the shift could reshape some traditional career ladders and impact workforce development. If AI agents handle entry-level execution work, companies may need to hire fewer people, and some learning opportunities may disappear for younger workers.

Ami Palan, senior managing director at Accenture Song, said that to successfully implement AI agents, companies may need to change the way they think about their corporate structure and workforce.

“We can build the most robust technology solution and consider it the Ferrari,” she said. “But if the culture and the organization of people are not enabled in terms of how to use that, that Ferrari is essentially stuck in traffic.”

Read more from Brainstorm AI:

Cursor developed an internal AI help desk that handles 80% of its employees’ support tickets, says the $29 billion startup’s CEO

OpenAI COO Brad Lightcap says ‘code red’ will force the company to focus, as the ChatGPT maker ramps up enterprise push

Amazon robotaxi service Zoox to start charging for rides in 2026, with ‘laser focus’ on transporting people, not deliveries, says cofounder

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Business

Trump says ‘starting’ land strikes over drugs in latest warning

Published

2 hours ago

December 12, 2025

Jace Porter

President Donald Trump said the US would be “starting” land strikes on drug operations in Latin America, though again declined to provide details on when and where the escalation of his military campaign would actually begin, or if countries could still do anything to avert the threatened action.

“We knocked out 96% of the drugs coming in by water, and now we’re starting by land, and by land is a lot easier, and that’s going to start happening,” Trump told reporters Friday in the Oval Office.

The US president for days has been pledging to broaden the effort, which comes after the Pentagon has launched a series of attacks on what it has called drug-smuggling boats in international waters off the coast of South America.

While Trump’s posturing has largely been seen as a pressure campaign against Venezuelan President Nicolás Maduro, he on Friday insisted the land targeting may not only impact Venezuela.

“It doesn’t necessarily have to be in Venezuela,” he said, adding that “people that are bringing in drugs to our country are targets.”

Trump has justified the actions in part by framing the fight against drug smuggling as akin to combat operations. He told reporters that if overdose deaths were counted like combat deaths, it would be “like a war that would be unparalleled.”

Striking targets on land would represent a major escalation, and Maduro earlier this week said that if his nation came under foreign attack, the working class should mount a “general insurrectionary strike” and push for “an even more radical revolution.”

Join us at the Fortune Workplace Innovation Summit May 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

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Business

Trump names Warsh, Hassett as top Fed contenders, WSJ says

Published

2 hours ago

December 12, 2025

Jace Porter

President Donald Trump said that Kevin Hassett and Kevin Warsh are his top choices to lead the US Federal Reserve and that he expects the next chair of the central bank to consult with him on interest rates.

Trump, in an interview with the Wall Street Journal on Friday, indicated that Warsh, a former Fed governor, has climbed up the short list of contenders to challenge Hassett, the White House National Economic Council head whom many had seen as the frontrunner for the job.

“I think the two Kevins are great,” he said. “I think there are a couple of other people that are great.”

Trump previously signaled that he already made up his mind, saying Monday he had a “a pretty good idea” of who to nominate. The president last month also said he knew who he would pick for the job. The latest comments suggest that the selection process remains in flux.

Trump met with Warsh on Wednesday. It’s not clear if Trump plans to interview other candidates for the job.

Earlier: Trump Says He’ll Meet Warsh as Fed Chair Search Nears End

The president said Warsh told him that borrowing costs should be lower.

Later in the Oval Office, Trump said the next Fed chair should consult with him on interest rates, a move that would upend a tradition of the Fed’s independence.

“I’ve been very successful, and I think my role should be at least that of recommending — they don’t have to follow what I say,” Trump told reporters, adding he expected to make a choice “over the next few weeks.”

“I think my voice should be heard, but I’m not going to make the decision based on that,” he continued.

Trump has moved to assert control over the central bank in his second term, regularly expressing frustration that the Fed has not more aggressively reduced borrowing costs under Chair Jerome Powell.

Trump, in the Journal interview, called for aggressively lowering rates, saying they should be “1% and maybe lower than that.”

The Fed on Wednesday lowered its benchmark rate to between 3.5% and 3.75%, its third cut in as many meetings. Three central bank officials dissented from the decision and the Federal Open Market Committee remains undecided about further reductions.

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