Ulrich moving up at DH: speculation mounts about naming a successor - Robert Ulrich becomes chairman of Dayton Hudson Corp

Discount Store News, May 2, 1994 by Richard Halverson

Speculation Mounts About Naming a Successor

MINNEAPOLIS--Robert Ulrich's recent promotion to chairman of the board of Dayton Hudson Corp. has triggered speculation about who will succeed him as head of Target Stores.

Stephen Watson, corporate president of DH and chairman of its department store division, has been targeted as a likely candidate to replace the 50-year-old Ulrich.

Watson jumped to the fore since two apparent heirs to Ulrich left Target during the past three years.

Accordingly, a successor to Ulrich probably will come from Target's parent, Dayton Hudson Corporation, when Ulrich takes over as DH chairman in July. He already has become chief operating officer of DH.

Ulrich will succeed Ken Macke, 55, who unexpectedly announced last month he will take an early retirement.

Over the next three months, Ulrich will recommend the name of his successor to the DH board for consideration so his replacement will be ready to take over as soon as Ulrich becomes chairman.

Speculation about who that will be focuses on Watson, who is also a director, because he has both the merchandising and operating experience the job requires.

The two top executives remaining under Ulrich at Target Stores are vice chairman Ken Woodward and executive vice president for store operations Bill Gerton.

Ulrich had been grooming both George Jones, who left in 1991 for a position as chairman of Rose's Stores, and Warren Feldberg, who left a month later to become chairman of Marshalls, as possible successors. To induce them to leave Target, the chains offered Jones and Feldberg lucrative contracts.

After Jones departed, Feldberg had a clear shot at taking over Target but left anyway.

The likelihood that either would return appears remote, entirely aside from the bonuses and stock they would forfeit if they were to return to posts at Target.

Jones previously departed from Target to take over as head of a women's apparel chain. Ulrich recruited him back, and Jones' subsequent departure for Rose's probably burned his bridges at Target.

Feldberg left on better terms, but his equity interest in Melville, Marshalls' parent, provides a powerful lock.

DH never has named a Target chairman from outside the company. That includes Stephen Pistner, whom Dayton picked up in 1970 when it acquired the Team Electronics chain that Pistner headed. Pistner preceded Macke as Target chairman.

DH declined to comment on who the potential successor might be.

If someone from DH department stores were picked, he would follow in the footsteps of Macke and Ulrich, who both started with DH department stores, went to Target, then returned to become the division's chairman.

Macke joined the Dayton Company in 1961 when it operated three stores. He served as Target chairman from 1978 to 1981, followed by Lloyd Hall and Bruce Albright.

Ulrich started as a merchandise trainee at Dayton's Department Store Company in 1967 and was named executive vice president of Dayton's in 1981. In May 1984, he became president of the combined Dayton Hudson Department Store Company and was promoted to Target president in December 1984.

In 1987, he was promoted to Target chairman and was named to the DH board last September.

When Ulrich was named a director, his chief competitor to succeed Macke was viewed as Watson.

But Ulrich held the edge because of the importance of Target to DH. Last year, the discount store division provided 61% of total corporate sales and 60% of operating profits.

In contrast, the department store division, comprised of the Dayton's, Hudson's and Marshall Field's chains, generated 16% of total sales and 24% of profits.