BREAKING: Dozens of Target stores set to close
Australian Target fans are in mourning today after parent company Wesfarmers announced up to 167 stores could disappear forever over the next year.
Under the drastic plan, up to 75 Target stores will be closed down while 92 will be converted into Kmart outlets, which Wesfarmers also owns.
The shock announcement regarding the struggling discount department store chain was made in a note to investors on Friday morning.
It revealed 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".
"For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue. 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," Mr Scott said.
"The actions announced reflect our continued focus on investing in Kmart, a business with a compelling customer offer and strong competitive advantages, while also improving the viability of Target by addressing some of its structural challenges by simplifying the business model.
"The reduction in the Target store network will be complemented by increased investment in our digital capabilities, following the continued strong growth in online sales across the Kmart Group and the pleasing progress in Catch since its acquisition in August 2019. The expansion of our digital offer will provide customers with access to the Kmart and Target products they love, together with over two million products from the Catch marketplace, via home delivery or click and collect."
A Target spokeswoman told news.com.au in a statement said the decision had been a difficult one.
"The decision to transform the Target store network, and particularly the very difficult 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.
"Our number one priority is talking to and supporting our teams. The majority of these changes will occur next year, and we are committed to looking for redeployment opportunities for affected team members in Kmart, Catch and other Wesfarmers businesses, including guaranteeing job offers to all Target team members in converted stores.
"Our team, customers and communities have always been at the heart of everything we do - and that doesn't change today."