There’s been a shock retail announcement this morning, with Wesfarmers confirming plans to shut up to 75 Target stores and convert another 92 into Kmart outlets.
The massive shakeup was announced to investors on Friday, following a major review into the struggling department chain.
“Following the completion of the first phase of the Target review, Kmart Group has identified a number of actions to accelerate the growth of Kmart and address the unsustainable financial performance of Target,” Wesfarmers said.
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The restructure will see between 10 to 40 large format Target stores converted into Kmarts, subject to landlord support, while an additional 52 Target Country stores will be converted into small format Kmart stores.
The remaining 50 Target Country stores will close for good, while up to 25 large format Target stores will also shut.
At this stage, there has been no announcement about which stores will be closing their doors.
Wesfarmers Managing Director Rob Scott said the changes will “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,” Mr Scott said.
“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,” he continued.
“The changes announced reflect our continued focus on investing in Kmart, a business with a compelling customer offer and strong competitive advantages.”
The closures and rebranding are expected to occur over the next twelve months, with the majority taking place in 2021.