In December 2013, Target, the American retail company, was hit by a cyber attack affecting up to 40 million card accounts and personal information from 70 million people.
Direct repercussions of Target’s data breach:
- Costs in repairing the damage are said to be around $26 million.
- Profits in the first quarter following the breach fell by 16%.
- CEO Gregg Steinhafel, a 35-year company veteran, resigned in May.
Since suffering one of the biggest data breaches in retail history, Target has been struggling to recover its image. Sales in its US stores have decreased by 0.3%, driven by a falling number of transactions. As a result, Target is now cutting its prices in order to drive footfall to stores, even though it will affect profit margins further.
As a result of Target’s breach, US retailers launched the Retail Cyber Intelligence Sharing Center last month, which shares information and analyses data to help each other combat cybercrimes. American Eagle Outfitters, Gap, Nike, Safeway, and Walgreen are just a few of the retailers participating in this initiative. The US Department of Homeland Security, US Secret Service, and the FBI are also expected to take part in the initiative.
Global Information Security Director Ken Athanasiou from American Eagle commented:
“The reality is, cyber-criminals work non-stop and are becoming increasingly sophisticated in their methods of attack and by sharing information and leading practices and working together, the industry will be better positioned to combat these criminals.”
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Whether some good has come out of Target’s breach is hard to say, but US retailers and security agencies coming together to share information and best practices can only be seen as a step in the right direction.