More than a thousand workers in the struggling retail industry are at risk of losing their jobs after the owners of discount department store chain Target decided to close as many as 75 stores.
The decision, revealed on Friday morning by West Australian conglomerate Wesfarmers, was immediately blasted by the agriculture minister, David Littleproud, who said Australians should boycott the company.
“If they want to turn their back on the most vulnerable, it just goes to show that corporate Australia has lost its way, morally,” he said.
He said the decision to close 52 country stores, a move which could leave some regional areas without a department store, showed the company “don’t give a rat’s about us”.
“I think Australians should vote with their wallets and not got near them,” he said.
In addition to the closures, up to 90 more stores are to be converted to Kmart stores, which are also owned by West Australian conglomerate Wesfarmers.
Some staff are to be deployed to Kmart stores but the closures and mergers are expected to result in the loss of between 1,000 and 1,300 jobs over the coming year.
The store closures and mergers take in more than half of Target’s 284 outlets across Australia.
Target was already struggling before the coronavirus pandemic smashed retail trade, while Kmart and another Wesfarmers chain, Catch, were growing.
Wesfarmers managing director Rob Scott said the company had tried to fix Target for the past decade but it had suffered from the rise of internet shopping and an influx of competition from overseas specialty retailers who have entered the Australian market.
“The retail market is fiercely competitive, especially in the mid-market apparel area,” he said.
“We have made every effort within Wesfarmers to find a sustainable way forward for Target.”
He acknowledged that closing Target Country stores could leave some regional areas without a department store.
“It’s not a decision we’ve made lightly and if we could find an economic way to service those communities we would have done so,” he said.
He said Littleproud’s comments were “probably spurred by disappointment”.
“We’re all disappointed with what’s happening with jobs in Australia at the moment,” he said.
Wesfarmers said it would take costs and write downs totalling as much as $1.3bn this year, including the cost of shutting the Target stores.
The future of the remaining Target stores remains up in the air, with the company conducting an “assessment of strategic options for a commercially viable Target and its remaining store network”.
“For some time now, the retail sector has seen significant structural change and disruption, and we expect this trend to continue,” Wesfarmers managing director Rob 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.”
Wesfarmers will also close its Anko homeware and clothing stores in the US.
Between 10 and 40 large Target stores and 52 of the 100 smaller Target Country outlets are to be converted to Kmarts.
Between 10 and 25 large Target stores and the remaining Target Country stores are to close.
About half of the 400 jobs at Target’s head office are expected to be lost.
Ian Bailey, the managing director of the Kmart group, which includes Target, said Wesfarmers still believed Target “has a future as a leading retail brand in Australia and is much loved by many customers, but a number of actions and changes are required to ensure it is fit for purpose in a competitive, challenging and dynamic market, including a smaller number of stores and a stronger online business”.
