Wesfarmers will reduce the size of Target’s store portfolio in an effort to improve productivity as it looks to refocus the struggling business towards a growth phase by FY21.
Speaking to analysts and investors at Wesfarmers’ annual strategy day on Wednesday, department stores chief financial officer Marina Joanou said that leadership has taken “decisive action” to cut costs at Target and reset the business, concluding a store network review across the division.
“We’ve reviewed the whole country and have created a plan that rebalances the network, removes unproductive space and opens accretive new space over time,” she said.
A 20 per cent improvement in store space productivity across the department store division is being targeted in what Joanou called a “long term game” that will include closures, store re-badges and new stores where appropriate.
Wesfarmers department store CEO Guy Russo, who has been tasked with spearheading the turnaround of Target, declined to outline the number of Target stores earmarked for closure, but told a Sydney audience that the plan involves large and small format stores.
“Our capital plans will be prioritised on the basis of performance, materiality and opportunities for market catch-up,” Russo said.