Wesfarmers invests $90 million in Target transformation

Wesfarmers has allocated $90-$110 million in this financial year for the conversion and closure of Target stores across the country.

In the second half of this year, the business will convert 19 large-format Target stores into Kmarts, while 46 Target country stores will be turned into K Hubs.

With its turnaround strategy well underway, Wesfarmers predicts that Target will be profitable for the full financial year, before one-off costs.

The prediction comes as the once-struggling retailer posted total sales growth of 2.3% and comparable sales growth of 13% for the first half of FY21.

MD Rob Scott put the business’ improvement down to an elevated apparel offering.

"Target’s profitability improved significantly in the half, reflecting a higher proportion of full-price sales and lower operating costs, supported by the ongoing simplification of the business.

"Target made enhancements to its product offer, particularly in apparel and soft home, and continued to prioritise online growth," he said.

In the past two years, Target has secured exclusive designer partnerships with the likes of Dannii Minogue and Mossimo, as well as launching on its sister site, Catch.