Australian fans can prepare to say goodbye to the discount department store chain within the next 12 months, parent company Wesfarmers said, revealing plans to “accelerate the growth of Kmart” and “address the unsustainable financial performance of Target” in a note to investors this morning.
“For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue,” Wesfarmers Managing Director Rob 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.”
Actions taken by Wesfarmers include converting a number of large format Target stores into Kmart, Target Country stores into small format Kmart stores, and closing between 10 and 25 Target stores and the remaining Target Country stores.
“These actions are expected to be implemented over the next twelve months with the majority occurring in calendar year 2021,” the note read.
A Target spokeswoman told news.com.au in a statement 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 team, customers and communities have always been at the heart of everything we do – and that doesn’t change today.”
Kmart Group managing director Ian Bailey said the company had made a “significant effort to avoid store closures, retain our valued team members, keep serving our customers and supporting our suppliers”.