s market share grow exponentially in the past decade, Target has been suffering a slow decline, with its position in the middle of the market – not quite as value-based as Kmart, and not quite as high-end as Myer – making matters worse. For now, the businesses will remain separate in the eyes of the consumer, though they will share systems in the back end, such as having a single tech-stack. Kmart Group CEO Ian Bailey said this was due to how difficult it has been to “get tech into Target”.  “This is really why we decided to push the two businesses into one,” Bailey told the Australian Financial Review. “Kmart and Target are both strong businesses. I don’t see us doing this from a position of weakness. It’s quite the opposite. I’d say we’re strong, but I think there’s an opportunity to really capitalise on this time and find ways to continue to deliver better value to customers.” Looking at Target’s trajectory over the past few years, however, it’s clear that this latest move could very well be the beginning of the end. Chop and change Acquired in 2007 along with Coles and Kmart, Target started off in a strong position in Wesfarmers’ stable. The business briefly considered rebranding all its Kmart locations to Target stores due to the retailer’s long-standing heritage. Wesfarmers ultimately didn’t move forward with that plan, and instead decided to double down and invest in Kmart and Target independently. But while Target initially seemed to be in a strong position, there was a lack of stability and understanding of what made the business tick within its management ranks.  During the early 2000s, Target was a powerful fashion retailer in the Australian market, delivering quality products at reasonable prices. In 2002, however, the business’ managing director Larry Davis, himself originally from North America, refocused Target on bringing US-based brands into Australia. Unfortunately, the designs didn’t resonate with Australian consumers and were often out of season, according to industry insiders, leaving the retailer overstocked. Davis eventually moved to lead Kmart, and Launa Inman took over as head of Target. Under her leadership the business balanced out, but the damage to its reputation as being a leader in the accessible fashion space had been done.  Another misstep was Target’s seeming inability to stay in a single lane, launching offshoots such as Baby Target, Country Target and Urban Target, which all catered to different demographics, but with largely the same product. The first signs of trouble under Wesfarmers’ leadership occurred in 2016, when then managing director Stuart Machin resigned amid an investigation into the business’ inflated HY16 figures. Machin himself had been hired in 2013, following Inman’s exit to Officeworks, to transform and reinvigorate Target. Following an internal investigation which found the business’ earnings had in fact been boosted by $21 million in the first half, the retail group revised its FY16  earnings before interest and taxes down significantly compared to a year prior – from a $90 million profit in FY15 to a $195 million loss in FY16. At the time, the business noted it had taken on $145 million in costs to “significantly reset” the business, though it also suffered a $50 million loss due to high levels of stock clearance and the impact of currency fluctuations. While Target narrowed its loss in FY17 to $10 million, it’s hard to say how the business has fared since then, since Wesfarmers began reporting Kmart’s and Target’s earnings together, under the Kmart Group banner. Nevertheless, there are other indications that this “reset” was not enough. In early 2020, Wesfarmers announced it would be shutting down or rebranding more than 160 Target stores across the country – more than half of the 290-odd stores the brand had at the time. Those stores that were being rebranded would become Kmart or Kmart Hub stores. It’s tempting to blame the store closures on the beginning of the Covid-19 pandemic, but as director of knowledge enablement at The Lumery Jason Pallant and Queensland University of Technology professor of marketing Gary Mortimer argued, Target’s decline was part of a much deeper trend. “Its decline is due to a combination of poor market positioning, confusing product strategies, a declining middle class consumer market and too much similarity with Kmart,” the pair wrote.  “The impacts of Covid-19 are just the icing on the cake.” ‘That’s Target’ The mass closures and rebranding left Target with a less complicated network to run, though the move cost Wesfarmers another $41 million, and saw it once again attempting to revitalise the business through a rebrand.  In late 2021, Target refocused on providing ‘affordable quality’, making an effort to highlight improvements in the quality and style of its private-label apparel offering, and signalling that “the old Target [customers] knew and loved is back”.  “We’ve done a lot of listening to customers. We’ve done a lot of listening to team members,” Target’s then-managing director Richard Pearson told Inside Retail. Pearson is now taking up the position of retail director in Wesfarmers’ new health unit following the consolidation.  “We have some tremendously passionate, long-serving team members who are really good advocates for the brand, and they were able to succinctly describe what Target was about when it was at its best.” The reset was largely aimed at improving the business’ apparel and soft home offering, targeting a core customer of “mums”, according to Wesfarmers’ FY22 Strategy Day presentation.  This shift in focus may also have been meant to differentiate it from Kmart, which has traditionally focused on homewares. But ultimately, their product offerings are not that different. And with Target having a number of failed resets in its wake, a store network that is smaller than ever, and soon, the same technology behind the scenes as Kmart, it’s getting harder to understand what actually separates the two businesses beyond branding.