Target's shock announcement: Set to close dozens of stores in Australia
Target will close dozens of struggling stores which are running at a loss, Wesfarmers chief executive Guy Russo announced on Thursday.
The Herald Sun reports Wesfarmers plans to reduce the number of Target stores by 20 per cent in the next five years.
Wesfarmers, which operates 305 Targets around the country, is under threat from retailers like Zara, H&M and Uniqlo.
Mr Russo said half the Target stores had been operating at a loss for the past two financial years.
“H&M and Zara and Uniqlo are the things we’re going after,” Mr Russo said.
The plan is the “supersize” the remaining stores, rather than growing store numbers.
The closure news came as a shock to employees of the department store giant.
Mr Russo said staff at closing Target stores could be moved to other Wesfarmers’ other brands, such as Kmart or Officeworks, but acknowledged this was not always possible in regional towns.
“We have a lot of high sensitivity of not only our team members in those small country towns but also to the local community where Target has been there for decades,” he said.
“Where it’s a little sadder is when it’s in the country town and there is no other retailer.”
However, Wesfarmers plans to open between eight and 10 new Kmart stores in Australia and New Zealand annually.