Target to shut Geelong HQ

Nearly 200 jobs will be lost as the troubled retailer shifts the site after close to 100 years.

Target Head office

Wesfarmers has taken a new broom through its troubled general merchandise and apparel chain Target and will close down the retailer’s headquarters in the Victorian regional town of Geelong, where it has been for nearly 100 years, to a new site somewhere west of Melbourne that will see the loss of nearly 200 jobs.

Target expects between 130 and 180 jobs to be lost as it shifts its base to Melbourne in the next year or two out of a total of 900 workers who are stationed at the Geelong Target headquarters.

It is believed some people who lose their job at Target might be offered new positions within the Wesfarmers empire, such as at its other retail operations like Coles, Bunnings, Officeworks and Target.

The shock shutting down of its Geelong HQ, where it has been since 1925, comes as the struggling Target is still reeling from an accounting scandal which saw improper payments from suppliers used to pump up its December half earnings by as much as 40 per cent — when in fact Target’s earnings had actually slumped to $50m from $70m for the first half.

The scandal has seen Target’s former CEO Stuart Machin and CFO Graeme Jenkins leave the group, with other executives involved in the accounting ruse also jettisoned.

On Monday Wesfarmers boss Richard Goyder unveiled the findings of an investigation into Target and called the scheme to artificially inflate profits “mind-blowingly stupid”.

Wesfarmers decided earlier this year to fuse together Target with its stablemate retail business Kmart in a new department stores division led by current Kmart boss Guy Russo.

Target has had a troubled few years with its revenue and earnings flatlining and recently shrinking sharply. In 2013, the company cut 260 jobs at Geelong following a restructure.

There could be more restructures and hacking away at the Target group as new boss Mr Russo comes to grips with the spluttering business.

It comes at a bad time for the Geelong region which is also suffering from the recent exit of big employers Ford and Alcoa.

Geelong mayor Darryn Lyons said he was “deeply disappointed and disheartened” by the news.

“Target has been part of the fabric and tradition of Geelong since 1925, when founder George Lindsay opened his first store here,” Mr Lyons said in a statement.

“I understand this is a business decision, but that does not make it any easier for our region.”