Wesfarmers appears to have finally lost patience with Target after eight years of attempting to turn the mid-market department store retailer around.

Target’s online sales are growing but represent about 3 per cent of total sales, well below online penetration of about 14 per cent in the non-food sector.
Wesfarmers has made numerous attempts to reposition Target under half a dozen managing directors closing unprofitable stores, converting a handful of stores to Kmart, shrinking its range, merging the Kmart and Target support centres and sharing resources and sourcing.
However, judging by Wesfarmers’ trading update on Tuesday, the latest turnaround plan has failed to gain traction, prompting chief executive Rob Scott to fast-track a strategic review.
“We’ve had various attempts over the years to improve the execution and improve the development of the Target offer but there are a number of structural challenges facing department stores such as Target,” Mr Scott told The Australian Financial Review.
“A lot of the structural challenges facing department stores relate back to the number of stores, the size of stores and the nature of occupancy costs in a world where online is more relevant,” he said.
“Target is growing online sales quite strongly it’s timely to review the store network,” he said. “That could mean store closures, it could mean conversion of some Target stores to Kmart, and it could mean reviewing the size of the stores we have in the network.”
“We think it’s important to look at all options to find a way forward for a viable Target in the future.”
Analysts said the restructure was likely to require a hit to Wesfarmers’ balance sheet, given Target’s lease liabilities of $1.6 billion.
“But [Mr] Scott has shown willingness to make tough decisions to avoid throwing good money after bad,” one analyst said.