The big problem facing Kmart and Target
There is no doubt Aussies are massive fans of the retailer Kmart, however new figures have revealed a major challenge on the horizon for the store.
Parent company Wesfarmers recently announced full-year earnings for its Kmart Group, which accounts for both Target and Kmart.
The figures revealed a likely drop of $103 million for the chains.
The jaw-dropping loss comes as a result of declining sales at the hand of Target, and lacklustre performance from the once star performer Kmart.
The department stores’ full-year earnings are now expected to reach between $515 million and $565 million – a 17 per cent decrease on last year’s hearty $618 million.
Between January and May, Target’s sales dropped by 2.3 per cent, all the while Kmart’s like-for-like sales grew by a mere 0.2 per cent.
.@Wesfarmers says sales at both its @Kmart and @Target ops are going
backwards ... $WES pic.twitter.com/2gu0EUqLxf— Will Willitts (@WillWillAFR) June 12, 2019
The full year’s earning results will not be revealed until late August, however Wesfarmers has said in a statement that Target’s current offer “requires ongoing repositioning".
Managing director Rob Scott said he is still hopeful in light of the bleak result.
“Kmart will continue to invest in its customer offer and price leadership strategy that has delivered strong returns over the long term,” he said in a press release.