Wesfarmers has outlined plans to halve Target’s 284-store network and slash jobs after a review found financial performance unsustainable at the troubled Target business.
The Perth-based conglomerate also announced writedowns and costs of nearly $1 billion in its full year accounts.
The company says it will convert 10 to 40 Target stores and 52 Country Target stores in regional areas to Kmart stores. It will also close 10 to 25 large format stores and 50 small format Target Country stores.
As a result, it will take a pre-tax charge of between $430 million and $480 million on its Kmart Group business, which includes an impairment of the Target brand.
Wesfarmers will also incur $120 million to $170 million in restructuring costs and provisions in Kmart Group.
“The actions announced reflect our continued focus on investing in Kmart, a business with a compelling customer offer and strong competitive advantages, while also improving the viability of Target by addressing some of its structural challenges by simplifying the business model,” Wesfarmers chief executive Rob Scott said.
Target Country has been hardest hit by the decision, with 50 to be axed and 52 set to become small-format Kmart shops.
Nationals deputy leader David Littleproud has called for a consumer boycott following the announcement.
In a withering spray at the corporate sector, Mr Littleproud accused major companies of turning their backs on regional Australia.
“Australians should vote with their wallets and not go near them.”
He said corporations should be showing social conscience during the coronavirus crisis.
“They make a lot of money. They make billions out of Australians,” Mr Littleproud said.
“If they want to turn their back on the most vulnerable, it just goes to show that corporate Australia has lost its way morally.”
Labor leader Anthony Albanese said shunning businesses could hurt workers.
“I’m not sure what a boycott of Wesfarmers means except people not going into stores and further job losses,” he told reporters in Sydney.
“I am not sure what Mr Littleproud’s comments would result in and how that would be constructive.”
Mr Littleproud signalled he would escalate his boycott calls if shops closed in his electorate.
“I’ll be saying to everyone don’t shop at these stores,” he said.
“Go and shop at those outlets that are prepared to support not just metropolitan Australians but regional Australians.”
The agriculture minister also pointed the finger at supermarkets and telcos for hurting regional communities.
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