Yahoo Finance Target to close up to 75 stores; 13,000 jobs at risk
Between 60 to 75 Target, Target Country stores will close
A further 62 to 92 Target, Target Country stores to be converted to Kmart
Most changes will take place in 2021
Target staff will be redeployed to Kmart, Bunnings, Officeworks where possible
A massive restructure is in store for Target with the discount department store announcing on Friday morning it will be closing or converting 167 stores across the nation.
Some outlets will be closed entirely while others will be converted to Kmart stores.
Between 10 to 25 ‘large format’ Target stores and 50 Target Country stores will be closed.
Meanwhile, 10 to 40 large format Target stores and 52 Target Country stores will be converted to Kmart stores.
According to parent company Wesfarmers, a review in April of Target found that the closures or conversions needed to take place in order to reduce its "unsustainable cost base”.
“For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue,” said Wesfarmers managing director Rob Scott.
“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.”
Target’s store support office will also be slimmed down and is facing a “significant reduction”.
The changes will take place over the next 12 months, with most to happen in 2021.
“The conversion of suitable stores to Kmart will address gaps in the Kmart network and is expected to result in an improved financial performance for the Kmart Group while meeting the Group’s return on capital hurdles,” Wesfarmers said in a statement.
Also read: Kmart shuts doors on some NSW, Victoria, and Queensland stores
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Also read: The company that owns Kmart and Target just bought Catch.com.au for $230m
Target employees will likely lose their jobs, though those at stores that will be converted to Kmart stores will be given the chance to hang onto their positions. A Target spokesperson told Yahoo Finance there are approximately 13,000 employees across the network.
“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.
“In addition, Wesfarmers has established a cross-divisional working group to identify redeployment opportunities for affected team members, including in Bunnings and Officeworks.”
The decision to overhaul the Target network was difficult but necessary, said Kmart group managing director Ian Bailey.
“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,” he said.
“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.”
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