Yahoo Finance Target set to shut stores as sales fall
Target stores are set to shut their doors as a tough retail environment continues to bite.
Parent company Wesfarmers’ 2019 financial year results reveal that Target’s total sales were down 1.5 per cent as the discount chain restructures.
“Although key elements of the Target range continue to grow, its trading results highlight that Target’s customer offer requires ongoing repositioning,” stated Wesfarmers’ 2019 full-year results shareholder quick guide.
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The news comes just over a week after Target announced it was cutting 80 workers from its head office as it announces a new strategy to offer higher quality wares.
Sales in Target’s womenswear, menswear and homewares ranges continue to grow, but has been “more than offset” by lower sales in its lifestyle, entertainment and beauty ranges.
The drop in Target sales prompted Wesfarmers CEO Rob Scott to flag that store closures were on the horizon.
"Ultimately, it will be most likely a smaller business over time as we reduce the size of the network and focus more on quality over quantity," Scott said as reported in SMH.
He also indicated that Target would shift towards having a more digital focus.
"I think over time, we'll see e-commerce sales represent a very significant proportion of Target's total sales," he said.
Wesfarmers acquired Catch.com.au, one of Australia’s largest online retailers, in mid-June.
‘Business as usual’
A Target spokesperson told Yahoo Finance that each store would be assessed on a case-by-case basis as leases expire, and that there was no set number of stores to close.
“It is business as usual for Target, and all stakeholders will be communicated with well in advance of any planned change to Target’s store network,” the spokesperson said.
“We look forward to continuing our relationship with the communities where we operate and remain committed to providing our customers fashion that excites and quality that endures.
“As always, and with great respect, our team members will be communicated with first if there are any planned changes to our stores and in all cases we will work with impacted team members to find redeployment opportunities at other Target stores or across the broader Wesfarmers Group.”
The news of Target’s network set to shrink comes as Big W announces 40 store closures.
A string of Australian retailers have closed their doors this year, such as Toys ‘R’ Us (which has since re-opened online).
Napoleon Perdis was also set for closure, but creditors struck a deal with investment firm KUBA Investments that will see all 28 stores remain open.
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