Target CEO reveals big changes to the retailer…starting now

What happens when the CEO of Kmart takes over Target? Stuff gets done. Guy Russo has made it clear that

What happens when the CEO of Kmart takes over Target? Stuff gets done. Guy Russo has made it clear that Target as we know it is getting a big overhaul and he is taking no prisoners.

One of the biggest sales of the year is the annual toy sale, which all major retailers do. Not any more for Target – that’s gone. So is pet care and luggage, as well as cafes and playgrounds that are haemorrhaging money from the once stable and popular retailer.

When asked if he will convert ailing Target stores into Kmart, he said that wasn’t the goal. “I don’t like closing stores,” he told News Corp. “Unless there is a lease coming up in a year or two with a really bad store we’d look at it, but I’d like to try to reset this business”.

Mr Russo said when he took over as CEO, around one third of Target’s 306 stores were losing between $1 and $2 million a year, one third were breaking even, and one third were making money.

He admitted that currently Target was “pathetic” in terms of sales per square metre and the strategy was to give more space back to items customers actually want to buy.

“Exiting categories out of a department store needs to be done properly because you’re buying a year in advance,” he said. “But we’ll be starting by exiting toy sales. Pets will go. Luggage will go. We want to increase the volume on apparel and soft home.

“We’ll exit cafes and give that space back to apparel. There are playgrounds in the children’s area. If a customer wants a playground we’ll suggest they go to the playground.”

“We will not sell products that do not make money,” Mr Russo said. “We’re lowering our prices to sell volume. Volume is critical to driving sell-through, lowering sourcing costs and further lowering prices.”

So how will Mr Russo differentiate Target from his other stellar project Kmart? “I’d like [Target] to be a really great fashion volume retailer like the other $70 billion up there,” he said. “I don’t know the others do it well. You walk the streets of Sydney, everyone’s on discount at the moment.

“Which would suggest everyone’s overbuying, overly optimistic about sales growth, spraying high and wide hoping the customers will come in. Not many will be winning when you’re discounting at 70 or 80 per cent off.”

“If I can clean up my model [H&M] will regret making the trip down under,” he said.

Tell us, will this big change to Target make you more or less inclined to shop there?

  1. You also need to look at who does the fashion buying for your stores, at the moment it isn’t all that good. Some of your stores are so untidy you can’t find anything and it would be nice to have some staff to help you.

  2. Bev  

    Need new fashion buyers..used to shop there a lot but rarely now as goods became overpriced and not that appealing

    • Patricia  

      I no longer shop as much as I used to at Target as their Plus depart has gone smaller, less choice and style. Do the buyers feel that all plus size customers live in t-shirts, leggings and track clothes and basic colours.

  3. Lesleyann Harris  

    I find Kmart cloths thin colors not one itiem has style or class . But target some items fill the critiern above please keep all stores clean and do recovery and fill sizes but I do love the homeware .

  4. Jenny James  

    Only when the workers in our local store get their act together and change signage when they should and make sure correct article correspond with their prices. Some of us older people find it hard to get down low and read the labels.

  5. Fay  

    If Target install self pay counters like Kmart I’ll be shopping elsewhere. I dont go to Kmart anymore for that reason.

    • stnc  

      too complicated for you? We reckon self-serve is quick and efficient, same at the super market , FABBO!

    • Sue Penny  

      When are you going to start selling more plus size underware, you used to sell it in Target, but not anymore, have had to start buying it elsewhere. Won’t go near any of the clothes in Kmart, all rubbish.

  6. J Taylor  

    When we go to town we always walk around Target but don’t often buy. Male fashion yuk, too dark couldn’t even find a pair of PJ s. No size range! Ladies fashion ok maybe if your 15, dull colours, no style dresses, either too short or will only fit someone 6 ft tall, try to shorten them and you loose any cut or style. Average ladies size in Australia is 14! Alway missing on the racks of EVERY shop. Dah! Want to sell more stock but will not supply the size! Customers can’t have bright clear coloured cloths because retailers only supply dark dull colours. The sun shines in Australia but we follow Northern hemisphere dark and dismal fashion. So walking around Target is just increasing our daily exercise😳

  7. Rith MacLeod  

    I hardly ever go into my local Target at Mornington – not good range of smart reasonably priced clothes. Mass displays, many big-sized wear, not enough variation. Target Frankston, which had a massive revamp, is much more attractive to a customer.

  8. Yvonne Janiszewski  

    Used to always buy knit ware years ago, but lately not worth looking at. Also had great home wares, ie wall pictures/ar but now nothing. At present its just a double take on KMart, is this going to change. There was always a difference between the 2 stores now they are the same. Don’t do this. The quality at Target was always better than KMart, whats happening here?????

  9. Pauline  

    I use to buy heaps of clothes at target. I think your range in larger ladies sizes are awful and sizing is smaller. I loved the Mode brand. Pj’s are smaller in sizing. Can’t buy a decent jumper. I haven’t bought clothes in Target for two years. I have to shop on line. Target use to be my go to store. It had choice and the quality was better than K mart.

  10. On Tuesday I purchased a pair of track suit pants (Danni Minogue Brand) in size 14P. They fit perfectly. Yesterday I bought a second pair as they were so comfortable. They were discounted from $39 to $20. I would not have paid $39 for them because they are polyester/viscose and will not last all that long. I really had to search to find anything size 14P. There are a lot of petite women in Australia. You need to cater for them with fashionable clothing. DM styles are classic but when in stock only seem to be really small sizes. By the way I’m 73.

  11. ex Kiwi  

    Target has lost the plot, clothes there are way over priced my husband loved his blue grass jeans which were a perfect fit he didn’t even have to try them on and now there are none of them there at all ….and he’s not the only one that complaining about this. We don’t even bother going into Target now too expensive.

  12. Val boyes  

    They need to start by finding a decent fashion buyer , perhaps one for the over sixties and one for the younger generation, can’t remember when I last bought clothes in target certainly not catering for my age group, they also need to upgrade target country stores which have become a dumping ground for what they can’t sell elsewhere. I look forward to seeing what they become

    • Nancy Saul  

      Not unless they change their bathroom. Issues. I wont shop there. Used to love Target, but not anymore!

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