Wesfarmers Is Converting Target Stores To Kmart Ones

Up to 75 Target stores to close in massive restructure

Susan Stokes is very familiar with the "small format Target" shoppers who are shocked to learn up to 75 stores will close.

Wesfarmers made the fatal mistake of allowing Kmart to "cannibalise" Target.

Parent company Wesfarmers announced in 2018 it was closing number of stores in the chain to achieve a 20 per cent overall reduction, which included Tenterfield's Target Country store. The degree of store conversions to Kmart and outright store closures appear to be a function of landlord support.

Speaking to the ABC, Wesfarmers said the decision will see as many as 1,300 positions at Target disappear.

All Target employees will be offered alternative employment across the Wesfarmers group, including Kmart, Officeworks, Bunnings, and Catch Group, which was acquired a year ago by Wesfarmers.

"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", Wesfarmers chief executive Rob Scott said.

Managing director Rob Scott told 7NEWS Kmart was the more profitable of the two stores, so it was made a decision to shift the focus away from Target.

The restructuring is expected to be implemented over the next twelve months with the majority occurring in calendar year 2021. As Aussies opt to shop online during the pandemic, Wesfarmers pointed to opportunities across its suite of online offerings including its click and collect option and its Kmart, Target and Catch online stores.

Up to 90 more stores are to be converted to Kmart stores, which are also owned by West Australian conglomerate Wesfarmers.

Its not yet known whether the Shepparton store will be affected. There's also the possibility of redeployment at Bunnings and Officeworks.

Associate Professor Nitika Garg from the School of Marketing at UNSW agrees and said Target has always "had a problem" in the market and failed to set itself apart from expensive and discounted retail stores.

Between 122 and 167 locations will either be converted or shut, or around half of Target's 284-strong store network.

He said the only way Target could have avoided its current bleak fate was if it had managed to dominate the "middle market sector" a decade ago.



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