The Target retail brand is set to nearly vanish in Australia, with parent company Wesfarmers announcing that up to 167 Target stores would either be re-branded to Kmart or closed down entirely.
"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.
Wesfarmers will also close its Anko homeware and clothing stores in the US.
Between 10 and 25 large Target stores and the remaining Target Country stores are to close. In a statement, Wesfarmers said the conversion will provide "improved financial performance" for the Kmart group and improve Target's viability.
Between 10 and 40 large Target stores and 52 of the 100 smaller Target Country outlets are to be converted to Kmarts.
"In addition, Wesfarmers has established a cross-divisional working group to identify redeployment opportunities for affected team members, including in Bunnings and Officeworks".
The store changes are set to happen over the next 12 months, with a lot of them scheduled for 2021. The Wesfarmers release noted that "Kmart Group will continue its investment in its digital channels".
The restructure will see between 122 and 167 locations either converted or closed, out of Target's 284 strong retail network.
The decision to overhaul the Target network was hard but necessary, said Kmart group managing director Ian Bailey.
In its update posted on the ASX this morning, Wesfarmers also reaffirmed that they will be expanding the online operations of their successful retailers, which include Catch and Kmart.
Wesfarmers said it would take costs and write downs totalling as much as $1.3bn this year, including the cost of shutting the Target stores.
"Leveraging the strengths of the Kmart Group, we have made a significant effort to avoid store closures, retain our valued team members, keep serving our customers and supporting our suppliers", he said in a statement.