‘Dramatic uplift in sales’: How Target Australia reclaimed its place as a retail powerhouse

Target Australia’s boss has revealed how the retailer turned around its profits, helped along by celebrity fans including mega WAG Bec Judd.

Exclusive: Kids’ fashion, homewares, and $15 pompom towels have helped fuel Target’s multimillion-dollar revival.

The Australian retail giant shut dozens of stores last year and turned others into its Wesfarmers-owned stablemate Kmart under a major restructure.

The gamble is already paying off for The Kmart Group – made up of Target, Kmart and Catch – which recorded a $693 million profit for the 12 months to June 30, up 69 per cent.

Target managing director Richard Pearson described the past year as a “huge year of reset for the business”.

Target reported comparative sales growth of 13.3 per cent and online sales increased to 15.1 per cent of total sales in the same period.

“We closed, or converted to Kmart, about half our stores,” Mr Pearson said.

‘Repositioning Target for the future.’ Target’s managing director Richard Pearson. Picture: Target

Target Australia has undergone a ‘reset’, including the closure of dozens of stores, as part of its new retail strategy. Picture: NCA NewsWire / Dan Peled

“Target is one of the most-loved brands in Australia but hasn’t been performing well enough for years.

“This is all about repositioning Target for the future.”

Target’s “reset” involved transforming into a digitally-led business, selling quality products at “accessible” price points.

“The category that was our standout success in the last year was kidswear,” Mr Pearson said.

“You can buy outfits for your children at Target that would cost twice as much at a speciality store and not be as good quality.

“The home categories were really quick growing (during Covid lockdowns).”

A range of pompom towels that mega WAG Bec Judd purchased herself and posted about on Instagram sold out in less than 24 hours.

“Bec posted about the towels and they sold out the day after,” Mr Pearson said, adding it prompted a “dramatic uplift in sales”.

Target differentiates itself from Kmart – known for its cheap, bargain-like prices – on quality. “We have a quality premium to Kmart and there’ll be a slight price premium,” Mr Pearson said.

Dannii Minogue has designed her own Target line, Dannii Minogue Petites, over the past seven years. She is wearing a $59 dress from her range. Picture: Target

Bec Judd wearing Target. Picture: Instagram

Sustainability is also a growing focus for Target, which now uses organic cotton in its clothing including in $40 European linen shirts and organic kids’ tees.

“100 per cent of our cotton is now sustainably sourced – with our price points, we’re able to build that extra sustainable element into our materials,” Target general manager of marketing Jamima White said.

“We want this quality to be accessible.”

Hayley Wilmot, Target senior designer of babywear, nursery and kids’ home, said the success of kids’ clothing was fuelled by the popularity of its “elevated” baby rompers, dresses, and sets made from organic cotton – including a $12 zip “cover-all”.

She said Target babywear, for instance, had gone viral on social media. “It’s always rewarding to see our customers proudly sharing their photos in their new Target outfits with their littlest ones,” Ms Wilmot said.

Kids’ clothing is the No. 1 selling category at Target. Picture: Target

The retailer’s kids range is a huge success. Picture: Target

A bedroom styled by Target. Picture: Instagram

Meantime, Target’s bed linen category – including sheet sets and quilt covers – alone is worth “millions of dollars,” Ms White said.

“In apparel, we have seen a trend away from skinny jeans to other cuts of jeans, priced at $39.”

Retail expert Professor Gary Mortimer said Target’s “reset strategy is working”.

“That’s evidenced by strong financial performance in the past 12 months,” Mr Mortimer, who is chairman of the Australian Retailers Association, said.

“Strategically, they recognise there was far too much duplication with their sister brand Kmart and a level of cannibalisation of sales – for a period of time, they (Target and Kmart) were very similar and shoppers shifted to the Kmart juggernaut.

“A decade ago, Target was the star performer and Kmart was struggling in the marketplace.

“They are now focused on those categories that they can actually dominate in, rather than fight against their competitors.

“They have pushed their ranges into the middle market more clearly – like kidswear.

“I think Target has won that middle market ground.”

Bec Judd shared this image of kids’ soft toys from Target. Picture: Instagram

‘THAT’S TARGET’

* Relaxed Arlo Stonewash sheets and quilt covers are among Target’s most popular products. “These are the same quality you would expect in premium speciality $99-$129 but half the price at $69,” White said.

* Textured fabrics, including double-cloth, linen, and dresses have been the fastest growing category in womenswear. “Our $40 European shirt is incredible value. This is $90-$110 in our premium speciality competitors,” White said.

“Our petites range from Dannii Minogue has also seen incredible results.”

* The weekend of November 27-28 is expected to be Target’s “biggest” for Christmas decorations.

Originally published as ‘Dramatic uplift in sales’: How Target Australia reclaimed its place as a retail powerhouse