Target stores to close in major restructuring

Updated: Target stores to close in major restructuring

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Owners cite "unsustainable financial performance".

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Updated: 3.45pm

More than 150 Target stores are either to close altogether or be converted to Kmart stores in a major restructuring by owners Wesfarmers.

The company told the stock market on Friday morning that it would shift its focus from the struggling Target brand to Kmart. It is also to increase its online efforts in a move from bricks and mortar stores in town centres.

Minister for Agriculture, Drought and Emergency management, David Littleproud, responded to the situation during a press conference in Toowoomba, Qld, by saying "I think this is a time where corporate Australia needs to show some social licence".

"They make a lot of money; they make billions out of Australians. And the reality is, is they want to turn their back on the most vulnerable, just goes to show that corporate Australia has lost its way morally," he said.

"Whether it be the supermarkets, whether it be the telcos. But now, now we've got these types of stores, these general stores doing this sort of stuff to regional Australia, just goes to show they don't give a rat's about us.

"And you know what? I think Australians should vote with their wallets and not go near them. That's the sort of reaction that all Australians should stand united. And if you're not going to support one another, well don't support them."

He also said he hadn't yet sought a response from parent company Wesfarmers as to why these Target and Kmart stores were closing, but was clear in his position, saying "don't shop at these stores. Go and shop at those outlets that are prepared to support not just metropolitan Australians, but regional Australians."

It also wasn't yet clear if all Target stores are to be closed or converted to Kmart. On its latest figures, there were 289 stores in Australia, more than those named in the statement for closure. They had a total of 13,000 employees.

The iconic brand in virtually every town centre began as a drapery store in 1926 in Geelong, Victoria.

In a statement, the company listed the measures to "address the unsustainable financial performance of Target".

"These actions include the conversion of 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."

It spelt out the changes:

  • "The conversion of between 10 to 40 large format stores to Kmart, subject to landlord support.
  • The conversion of approximately 52 Target Country stores to small format Kmart stores.
  • The closure of between 10 to 25 large format Target stores and the closure of the remaining 50 Target Country stores which are not suitable for conversion to Kmart.
  • A significant reduction in the size of the Target store support office."

Wesfarmers managing director Rob 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."

"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."

The closures of the familiar brand stores will take place over the next twelve months.

Target has a strong representation in Canberra and the wider region, with stores in the Canberra Centre, Belconnen, Weston Creek, Queanbeyan, Yass, Goulburn and Tumut.

The company said that Target employees in stores being converted to Kmart would be offered employment under the new brand. Other employees "will be given consideration for new roles".

Its statement said Wesfarmers and the Kmart Group "recognise that these actions will have a significant effect on a number of Target team members".

"All team members in Target stores scheduled for conversion to Kmart will receive an offer of employment from Kmart. Target team members affected by store closures will be given consideration for new roles created in Kmart and Catch as those businesses continue to grow."

Some country towns have Target Country stores as the only remaining department-style store. It's not clear how many - if any - will convert to Kmart.

The story Target stores to close in major restructuring first appeared on The Canberra Times.

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