Say goodbye to one of your favourite department stores

Many Target locations are about to close, according to Wesfarmers head honcho Guy Russo.

For years, Target’s popularity has been in steady decline. When the department store turned its attention towards designer fashion collaborations and away from affordable family-oriented products, Kmart was there to pick up the slack.

Wesfarmers, the parent company of Target and Kmart, has declared that underperforming Target branches will either close or be “rebadged” as Kmart.

While the locations have yet to be announced, the aim is to increase Target’s productivity by 20 per cent – something that can only be achieved with significant changes.

Guy Russo was responsible for Kmart’s rise to the top of the department store market. His next goal is to turn Target’s profit around, but is it too much to expect Russo to work his retail magic for a second time?

Kmart’s popularity and profit stems from a wide range of cheap but effective products that mimic luxury brands while maintaining a relaxed and family-friendly feel.

Russo admits it will be a while before Target can reclaim its credentials. The end goal is to recover “the position it lost to Kmart as the leader of ‘cheap chic’ in Australia”.

In recent years, Target has taken steps to become a mid-range fashion destination. Books, electronics, stationery and even linen have made way for an increasing amount of clothes, though customers seem reluctant to shop the prices Target has on offer.

Is there still a need for a mid-range department store at this stage of the game? Overseas retailers are flocking to Australian shores, and online retail giant Amazon is expected to take over “15 per cent of the department store market share by 2026” after it launches in Australia in the near future, according to a Morgan Stanley report.

The same report predicts that Target will be “loss-making until 2020”.

These stats are a harsh blow for Target; according to Peter Ryan of Red Communication, Target was “the most profitable department store in the country” until eight years ago.

“I don’t see any reason why we can’t get it right,” says Russo. “I just can’t switch on a light switch and get it right in a year.”

Do you think Target can make a comeback? Or is the department chain on borrowed time?