The struggling Australian retail sector has received a new blow with the announcement up to 75 Target stores will be closed and others converted to Kmart outlets.
The news came as Wesfarmers today unveiled $780 million of writedowns on its Kmart Group and industrial and safety division.
Following the completion of the first phase of its Target review, the Perth based company says it will convert some Target and Country Target stores to Kmart stores but will close 10 to 25 large format stores.
Additionally, 50 small format Target Country stores will also close.
Between 10 and 40 large format Target stores will be converted to Kmarts, subject to landlord support. An additional 52 Target Country stores, which are largely in regional areas, will also be converted to small-format Kmart stores.
The remaining 50 Target Country locations will be shut, and a further 10 to 25 large-format Target stores will also close.
Between 122 and 167 locations will either be converted or shut, or around half of Target's 284-strong store network.
Earnings at Target have declined significantly as customer footfall drops in shopping centres and discretionary categories weaken, particularly apparel.
Wefarmers Managing Director Rob Scott said the move was needed to strengthen the Kmart Group, while also improving the commercial viability of Target.
"For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue," Mr Scott said.
"With the exception of Target, Wesfarmers' retail businesses are well-positioned to respond to the changes in consumer behaviour and competition associated with this disruption."
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