NEW YORK -- In a move that took some analysts by surprise, Kenneth A. Macke, chairman and chief executive officer of Dayton Hudson, said Thursday he will retire in July. Macke is 55.
He is being succeeded by Robert J. Ulrich, chairman and ceo of DH's Target division. Ulrich has already assumed the ceo title and will take over as chairman in July. Target is the company's largest division and the nation's third largest discounter, behind Wal-Mart and Kmart.
"After 11 years as ceo, it is time for me to step aside and make room for the next generation of Dayton Hudson leadership," said Macke, in a statement from the firm's Minneapolis headquarters. "The board and I have agreed that the corporation is well positioned and that this is a good time for me to retire. Bob Ulrich is ready for the new challenge."
Neither he nor Ulrich were available for further comment Thursday.
Ulrich, 50, whom observers say was being groomed for DH's top spot, was named president of Target in 1984 and chairman and ceo in 1987. He was elected to the DH board last September.
His successor has not been named, but industry analysts think it likely that the replacement will come from within the company. Possible candidates, they say, are Kenneth Woodrow, Target's vice chairman; M. William Gerton, executive vice president of operations, and Robert Guelich, senior vice president of merchandising.
"Ulrich is a real leader, and has done a tremendous job running Target," said analyst Walter Loeb of Loeb Associates. "That shows how important Target is to the corporation."
He thinks Ulrich's successor might be someone from the division's senior management.
Janet Mangano, retail analyst with Burnham Securities, said, "This is a big surprise. I expected Ken Macke to stay there forever. Bob Ulrich is an excellent successor, but I'm surprised Ken is stepping down from such an active role."
Mangano said DH's operations are poised for a turnaround -- particularly the troubled Mervyn's division -- with the uptick in the California economy.
She concurred that DH would probably look within for Ulrich's successor, because all of its divisions have well-developed management and the company has a good track record of nurturing executives.
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