We’re on target – boss
Russo sticks by focus on low prices
TARGET boss Guy Russo has defended his turnaround strategy after the struggling retailer’s revenue slumped in the first quarter.
Target’s total sales fell 17.1 per cent to $643 million for the first three months of the 2017 financial year, compared with a year ago, parent company Wesfarmers’ trading update shows.
Comparable store sales, which strip out store closures and openings, plunged almost 22 per cent as the retailer reduced its promotions and stopped its annual toy sale.
Mr Russo, who was given the dual role to lead Kmart and Target in February, defended his decision to dump the popular toy sale.
“The toy sale was an unprofitable event,” he told an analyst briefing yesterday. “It involved six months of holding and managing stock and extensive Christmas lay-bys.
“It was the right thing to do for the long-term.”
Mr Russo said the benefits might be realised in November and December.
He said he would continue with plans to shift away from promotions and towards everyday low prices with a focus on establishing Target as a quality and affordable fashion retailer.
“Kmart will own lower prices on everyday items and Target will be known for amazing fashion and quality and low prices,” he said.
Target’s slowing sales momentum from the fourth quarter of the 2016 financial year continued into the first quarter of the 2017 financial year,” Mr Russo said. Kmart continues to perform strongly with sales rising 11.2 per cent to $1.2 billion for the quarter.