Wesfarmers announces major overhaul of Target, Kmart stores

Scores of struggling Target stores across Australia will shut forever and 92 could be rebranded as Kmart in a major overhaul of the ailing retailer, with staff at a Brisbane store saying they’d been left in the dark.

Australian Target fans are in mourning today after parent company Wesfarmers announced up to 167 stores could disappear forever over the next year.

Up to 75 Target stores will be shuttered and 92 others converted into Kmart outlets after a review into the struggling retailer’s operations.

It means around half of Target’s 284-odd Australian stores could be affected.

Wesfarmers, the parent company of Target, Kmart and Bunnings, told the ASX this morning it had “identified a number of actions to accelerate the growth of Kmart and address the unsustainable financial performance of Target”.

Push for Sunday trading, midnight hours to help kickstart Queensland retail jobs

Retailers collapse after make or break Christmas trade

Wesfarmers is closing up to 75 Target stores.

“These actions include the conversion of suitable Target and Target Country stores to Kmart stores, the closure of between 10 to 25 large format Target stores, the closure of the remaining 50 small format Target Country stores, and a significant restructuring of the Target store support office,” the company said.

What stores will be closed has not been revealed.

Some Target employees would be offered redeployment opportunities.

Wesfarmers CEO Rob Scott said the company was continuing to assess how Target and its remaining store network could become commercially viable.

“For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue,” he said.

“With the exception of Target, Wesfarmers’ retail businesses are well-positioned to respond to the changes in consumer behaviour and competition associated with this disruption.”

Struggling Target stores will be rebranded as Kmart outlets.

The changes were expected to be implemented over the next 12 months, with the majority occurring next year.

Staff at Target Garden City said there had been no communication from head office and they were in the dark as to whether their store was on the chopping block.

One manager asserted he was not worried, before directing media enquiries to Target’s media department.

There is already a Kmart department store in Westfield Garden City.

A Wesfarmers spokesperson said that the conversion of stores to Kmart would give regional customers increased access to a selected range of Kmart’s home, apparel and general merchandise products.

The group would also expand its click and collect offering with the full range of Kmart, Target and Catch products available at all stores.

Commercially viable Target stores would continue to be assessed with further changes to the operating model expected.

All staff in Target stores scheduled for conversion to Kmart would receive an offer of employment from Kmart.

Staff affected by store closures would be given consideration for new roles created in Kmart and Catch, and possibly Bunnings or Officeworks.

Kmart Group managing director Ian Bailey said that the decision to significantly reduce the Target store network was difficult but necessary.

“Leveraging the strengths of the Kmart Group, we have made a significant effort to avoid store closures, retain our valued team members, keep serving our customers and supporting our suppliers.

“Unfortunately, the disruptive and competitive nature of the retail sector requires us to make some difficult decisions to ensure we have a viable Target business into the future, while continuing the strong growth of Kmart and Catch,” Mr Bailey said.

“We continue to believe that Target has a future as a leading retail brand in Australia and is much loved by many customers, but a number of actions and changes are required to ensure it is fit for purpose in a competitive, challenging and dynamic market, including a smaller number of stores and a stronger online business.”

Originally published as Wesfarmers announces major overhaul of Target, Kmart stores