Target is working through a major restructuring process which would result in job losses for more than thousands of workers since the retail major has announced that it will shut as many as 75 stores.
Another 92 Target stores will be converted to Kmart outlets, making a total of 167 stores to be closed or converted.
According to the parent company Wesfarmers, a review of Target in April found that these closures or conversions were needed in order to reduce its ‘unsustainable cost base’.
Wesfarmers unveiled US $ 780 million worth of write downs on its Kmart Group and industrial and safety division.
The decision was revealed by West Australian conglomerate Wesfarmers on Friday morning, who maintained that the move was necessary to shift the focus from Target to Kmart, which is more profitable.
Around 40 large Target stores and 52 Target Country stores are to be converted into Kmart stores, while the remaining 50 Target Country outlets and around 10-25 large Target stores will be shut.
Scott explained that the reduction in store network of Target will be complemented by increased investment in digital operations. These plans by Wesfarmers are to be carried out within the next 12 months.
Earnings at Target have declined in a significant manner since the customer footfall has dropped in shopping centres and discretionary categories, particularly apparel, have weakened in the recent times.