Target stores across Australia set to close within months

The struggling discount department store has confirmed up to 167 Target branches across Australia could vanish within 12 months.  

Up to 75 Australian Target stores will be permanently shut within months as the discount department store struggles to reverse its fortunes.

In a note to investors on May 22, parent company Wesfarmers revealed that in addition to the closures, up to 92 branches will also be converted into Kmart outlets, meaning around half of Target’s 284-odd Australian stores could be affected.

Wesfarmers – which owns both Target and Kmart – also revealed $780 million of writedowns on its Kmart Group and industrial and safety branch, and a number of plans designed to “accelerate the growth of Kmart” and “address the unsustainable financial performance of Target”.

They include converting “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”.

Wesfarmers managing director Rob Scott said the changes would “enhance the overall position of the Kmart Group, while also improving the commercial viability of Target”.

The shock announcement comes just weeks after it was revealed that three Target stores across three Australian states were also earmarked for closure.

A Target spokeswoman originally confirmed the store in Pasadena in South Australia would close on May 30, with affected team members informed of the closure in late January.

It will be followed by the closure of the Target branch in Campbelltown in Sydney’s southwest on July 4, with staff of that store informed in early March.

The Meadow Springs shop in Mandurah, West Australia will also close on August 1, with employees told in mid-January.

But the spokeswoman stressed these were not new announcements, and that the closures were unrelated to the COVID-19 pandemic or the strategic review announced for Target just last week.

Staff from affected Target stores were informed of the closures earlier this year.

Last Monday, parent company Wesfarmers released an update to the market on how retail trade was faring in its various businesses, with Target taking a clear hit.

Managing director Rob Scott said that in recent weeks, “in-store sales momentum has moderated in Kmart and has declined significantly in Target, reflecting the broader decline in customer footfall in shopping centres and ongoing weakness in discretionary categories, particularly apparel”.

In the six months to December, it recorded a sales fall – again – and Wesfarmers lamented the mid-range department store chain was performing “below expectations”.

At the moment there are 285 Target stores in Australia, with four stores closing between July and December 2019.

Meanwhile, retail experts have long reported on the brand’s struggles, with Queensland University of Technology retail expert Dr Gary Mortimer previously telling news.com.au Target posed an ongoing problem for Wesfarmers.

“Target remains an issue for the Wesfarmers group, despite significant changes to product ranges and investment in price,” he said.

“There remains a healthy level of cannibalisation between Kmart and Target, which questions the strategy behind running two differently-branded discount department store businesses essentially serving the same market.”

Originally published as Target stores across Australia set to close within months