Brian Cornell, the first CEO from outside the Target corporate hierarchy, inherited some major problems and made some tough calls right off the bat. Now he’s grappling with an intensely competitive holiday retailing landscape.

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CHICAGO — Target CEO Brian Cornell is leading the transformation of a megaretailer that had lost its way and cachet, not to mention its “cheap chic.”

Cornell, 56, became CEO in August 2014 after more than 30 years at retail and consumer product companies, including heading up PepsiCo’s largest division, Sam’s Club and Michaels Stores.

As the first CEO recruited from outside the company, Cornell inherited some reputational problems at Target, including damage caused in 2013 when hackers breached the retailer and stole information on some 70 million customers, including 40 million credit and debit-card numbers. Then in January, he made the tough call to abandon Target’s money-losing move into Canada, closing all 133 stores there and cutting 17,000 workers.

Brian Cornell, Target CEO

Age: 56

Career: Named Target chairman and CEO in August 2014. Served as CEO of PepsiCo’s Americas Foods division from 2012 to 2014, and before that was CEO and president of Sam’s Club, a division of Wal-Mart Stores.

Compensation: From August 2014 hire through fiscal year-end on Jan. 31, 2015, received pro-rata salary of $595,000 but forfeited $4.7 million in compensation due to missed goals. Also received $14 million make-whole grant to replace forfeited equity from former employer.

Education: Earned a bachelor’s degree at UCLA and attended Anderson School of Management.

Other roles: Director at snowmobile maker Polaris Industries; board member at UCLA’s Anderson School of Management, Retail Industry Leaders Association and the Smithsonian’s National Museum of African American History and Culture.

Sources: Target Corp. reports

But Minneapolis-based Target seems to be regaining favor with customers as it strengthens flagship product categories: style, baby, kids and wellness. For the third quarter, its sales rose a respectable 1.9 percent at existing stores, where traffic increased for the fourth consecutive quarter, leading the company to raise its full-year 2015 profit outlook.

Heading into the holiday-shopping season, Cornell is seeing mixed results from competitors. Top foe Wal-Mart saw robust sales in the third quarter, as did Home Depot and TJX (T.J. Maxx and Marshalls), while others, like Nordstrom and Macy’s, stumbled into the biggest buying season.

More broadly, Cornell is dealing with a shifting landscape, as traditional retailers try to reconcile their online and offline shopping worlds to compete with Amazon and other online retailers that don’t have all their costs.

During a recent walk around a new flexible-format store in Chicago, in this case a small urban test store downtown, Cornell talked about Target’s strategy and his philosophy on leadership.

Q: Talk about using Chicago as a test market for both smaller store sizes and localized product offerings.

A: We’ve used Chicago as an important part of our localization efforts, as we think about how the guest responds when we begin to customize assortment, when we offer things like Fan Central (local team sports apparel), when we introduce locally relevant food products, beverage products.

We want to really understand what are the items they are looking for for the home and really customize our assortment of things like patio grills, recognizing that they’re living downtown and they’re probably not looking for a five-burner grill, but you want something that fits on your patio.

On average, we’re changing out 5,000 or 6,000 items. We’ve been very pleased. We’re seeing 1.5 percent to 2 percent growth in those test stores vs. the control stores. So clearly, the shopper, our guest, is responding to the local changes we’re making.

We’ll begin to expand and take the learning from this market to other parts of the country over the next couple of years.

Q: More generally, where do you see Target fitting in the retail landscape, with so many departments, from clothing to groceries?

A: We think we still play a very important role with the American consumers as an iconic brand. We’re clearly modernizing our strategies. Years ago, we didn’t use our stores as pickup locations (for online orders). More and more, we’re using our stores to make sure we can deliver that last mile and deliver it in a short period of time.

Q: To compete with online retailers? Amazon?

A: Absolutely. I think we have a huge advantage over many of those traditional online retailers in that we have stores. Everywhere we go, we see traditional online retailers, their idea of innovation is opening up a store.

We recognize that most of our guests today shop in stores, but we also know, particularly as the U.S. consumer moves back into urban centers — it’s happening in Chicago and around the U.S. — we’re going to need to have flexible formats and give guests a chance to shop online. But as opposed to having a package delivered to your front door when you’re at work, (and missing the delivery) we offer the convenience of ordering online and coming to one of our 1,800 stores to pick it up when they want to.

Q: With apparel, in particular, people used to boast that they got great clothing buys at Target, pronouncing it with a French flair, “Tarjay.” Not so much anymore. Is that something you have to get back to?

A: That’s certainly our goal. I think over the last 15 months, the team, particularly our product development design group, has made some big strides in getting that back. I think it starts with understanding trends, really taking the time to understand the consumer. That is something we’ve clearly recommitted to, making sure we’re bringing that quality and innovation to those style categories, apparel, home and beauty, so that we elevate that “Tarjay” experience.

Q: Experimenting with the new flexible-format store in Chicago seems to have an element of innovation and risk-taking. Does it?

A: It’s taking the right, measured risk. We like what we see with flexible formats, and this one is off to a very good start. But we’re not rolling out 100. We’ll listen, learn and iterate.

The stores we opened a year ago look different from when they first opened because we made some adjustments based on the feedback.

I spend a lot of time looking at our competition. We’re not so prideful that we can’t learn from what our competitors are doing.

Q: What company or executive do you admire and why?

A: There are certainly some retailers that I look at all the time to leverage learning. Howard Schultz (CEO of Starbucks) is not only a peer in the industry but certainly one of our partners. As we think about the kind of things we’re trying to accomplish at Target, a combination of iconic brands and great experience, I think they’re (Starbucks) certainly a company I admire. They’re innovative.

Q: What is your greatest fear?

A: I think what keeps me up at night right now is ensuring we stay focused. We’re at a point in time where we have a very clear strategy in place, some very defined initiatives, and we have to make sure we’re focused on executing and refining those initiatives. We’re in the early stages of transforming the company.