Target stores to be closed or rebranded as Kmart, Wesfarmers announces

Daniel Fowler
May 23, 2020

"The decision to transform the Target store network, and particularly the very hard decision to close stores, is not one that is made lightly, but one that is necessary to improve the commercial viability of the business and to support the thousands of people we employ", the spokeswoman said.

More than 100 Target stores across Australia could be axed or rebranded as Kmart in a major revamp of the struggling chain.

"Over the last two months, Bunnings and Officeworks have experienced significant demand growth as customers and their families spent more time working, learning and relaxing at home", Wesfarmers said at the time.

"It would also then come into worldwide competition with global fast fashion retailers like H&M and Uniqlo".

Kmart Group Managing Director Ian Bailey described the decision to reduce Target stores as hard but necessary.

"When you look at Kmart, it's very clear who they are and what they stand for".

Experts claim Target failed to set itself apart from expensive and discount stores. For instance the ads often have a much older woman say 60 and over trying to sell business attire.

Target's problems were worsened by COVID-19 but began before the health crisis.

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For more information, Kmart's full statement and FAQ's can be found here.

While Wesfarmers has indicated it will preserve as many jobs as possible, Dr Mortimer said shopping centres and landlords would be most concerned by today's news. The Target brand will remain intact and some stores will stay open but Wesfarmers intends to convert many of them into Kmarts with a different retail profile.

Meanwhile, IBISWorld has questioned if today's news could spell the end of Target, claiming it had "underperformed Kmart over the past five years" with sales "declining significantly" after a brief coronavirus-led boost in February and March 2020.

With the majority of Target stores in northern NSW under the Target Country brand, including Casino, Goonellabah, Ocean Shores, Yamba and Murwillumbah, these stores could potentially close or be converted into smaller Kmart stores.

By 1325 AEST, Wesfarmers shares were up 5 cents or 0.1 per cent at $38.93 amid a weak Australian market.

Department Stores have recorded an overall decline. "Their key messaging is on point", Ms Sahay said.

"Target's mid-market position has failed to appeal to either of these types of shoppers".

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