Target(AUS) Stores Closures 2020: 150 Locations To Close, Some Stores To Convert To Kmarts
Shoppers enter a Target store in Arvada, Colorado Photo: Reuters
Wesfarmers (WES.AX), the owners of Target and Kmart stores in Australia, said it will close about 150 Target stores, and convert some locations to the Kmart brand under a significant restructuring strategy.
The retail operator reportedly has 284 Target stores in the country, which will be pared down to 125 locations as Wesfarmers shifts its focus to Kmart. It was unclear at the time of writing which stores would be closed or rebranded, but closures and conversions are expected to take place over the next 12 months, the company said.
Wesfarmers did say that 10 to 40 Target stores would be converted to large-format Kmart locations upon landlord approval, and 53 Target Country stores would move to small-format Kmart stores. A total of 10 to 25 large-format Target stores would be closed, and the remaining 50 Target Country stores would also be closed.
"For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue," Rob Scott, managing director at Wesfarmers, said in a statement. "With the exception of Target, Wesfarmers’ retail businesses are well-positioned to respond to the changes in consumer behavior and competition associated with this disruption.
"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 store closure will also come with a reduction of workers at Target, with many being transitioned to the Kmart brand.
"Leveraging the strengths of the Kmart Group, we have made a significant effort to avoid store closures, retain our valued team members, keep serving our customers and supporting our suppliers," Ian Bailey, managing director at the Kmart Group, said in a statement. "Unfortunately, the disruptive and competitive nature of the retail sector requires us to make some difficult decisions to ensure we have a viable Target business into the future, while continuing the strong growth of Kmart and Catch.
"We continue to believe that Target has a future as a leading retail brand in Australia and is much loved by many customers, but a number of actions and changes are required to ensure it is fit for purpose in a competitive, challenging and dynamic market, including a smaller number of stores and a stronger online business," he added.
Shares of Wesfarmers stock was down 0.05% as of market close on Friday.