Sitting Targets set to close

DOZENS of Target stores are set to close over the next five years, with half of the outlets running at a loss, the head of the discount department store chain has warned.

But the store is repositioning itself to take on fast fashion giants, according to Wesfarmers department stores chief executive Guy Russo.

“H&M and Zara and Uniqlo are the things we’re going after,” he told investors yesterday. Mr Russo said Target was set to reduce its store space footprint by 20 per cent over the next five years.

Perth-based Wesfarmers owns Target, Kmart, Coles and Officeworks among other businesses. Target operates 305 stores across Australia with half of those running at a loss over the past two financial years, Mr Russo said.

He said he was focused on store space — not store numbers — but said he would not renew leases on lossmaking stores as they expired over the next five years.

“When a lease comes up … it would be at that point I would close a store,” he said.

Mr Russo said Target had loss-making stores which ranged from 1000sq m to 9000sq m in size in both city and country locations.

“It’s a collection of small, medium and large,” he said of the stores facing closure.

Meanwhile, Kmart is planning on opening eight to 10 new stores annually for the next couple of years.

Kmart managing director Ian Bailey said it would also explore forming joint ventures with overseas partners to sell its wares in foreign markets such as Thailand or Indonesia.