| 22.05,20. 11:55 AM |
Target shuts up to 75 stores and converts others to Kmart, putting up to 1,300 jobs at risk
Up to 167 Target and Target Country outlets will be shut or converted to Kmart stores as part of a large restructure.(ABC News)
Up to 167 Target and Target Country stores will be shut or converted to Kmart sites, putting as many as 1,300 jobs at risk.
The retailer's owner Wesfarmers is shrinking the struggling chain.
With more than 280 Target stores in Australia, the restructure could see more than half of the Target store network gone.
Following a review, the conglomerate says it will convert 10 to 40 suitable Target locations into Kmarts and shut between 10 and 25 further Target stores.
Around 52 Target Country stores, which are concentrated in regional areas, will be converted to smaller-format Kmarts, while the 50 remaining Target Country stores will shut.
The manager of Wesfarmers' department store division, Ian Bailey, said the final number of store conversions would depend on individual negotiations with landlords.
The restructure will also see a "significant reduction" in the size of the Target support office.
Calls for boycott as 1,300 roles at risk
The company said there were would be "redeployment opportunities in Kmart and other Wesfarmers businesses" to "minimise the effect of these changes on Target team members".
It said all staff at stores that will be converted will be offered a role at the new Kmart store.
Wesfarmers told the ABC it expects a reduction of 1,000 to 1,300 roles over the next 12 months, with most job losses occurring in 2021.
It said that was based on "conservative redeployment assumptions" and it would be working to lower that number.
The company would not confirm the locations of stores market for conversion or closure.
Federal Government frontbencher David Littleproud slammed the announcement, saying the timing was devastating for workers.
"This is a time where corporate Australia needs to show some licence. They make a lot of money, they make billions out of Australians, and the reality is that they want to turn their back on the most vulnerable, just goes to show corporate Australia has lost their way, morally," Mr Littleproud said.
"I think Australians should vote with their wallets and not go near them."
'Mid-market position failed'
Industry analysts say Target has failed to appeal to customers while Kmart has attracted discount shoppers.
"Consumer demand is becoming increasingly polarised, with shoppers seeking either ultra-low-cost or high-quality, ethically made goods," IBISWorld senior industry analyst Daisy Feller said.
"Target's mid-market position has failed to appeal to either of these types of shoppers."
Wesfarmers managing director Rob Scott said the retail sector had seen "significant structural change" and this was expected to continue.
"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," Mr Scott said.
Wesfarmers will book $120-170 million in restructuring costs and a $430-480 million impairment charge as a result of the overhaul.