Kmart and Target to be united under one department stores division

Wesfarmers says new structure is about maximising efficiencies and opportunities across the two department stores

Wesfarmers is uniting its Kmart and Target brands under a new department stores division, and has appointed current Kmart managing director, Guy Russo, as its chief executive.

The ASX-listed retail group’s new structure was revealed during its half-year financial results today, and also comes after Kmart experienced double-digit sales growth. Kmart reported a 12.6 per cent increase in year-on-year revenue to $2.7 billion in the six months to 31 December 2015, and a 10.5 per cent rise in EBITDA to $368m.

According to Wesfarmers, the new department stores model is about maximising and sharing opportunities where appropriate across Kmart and Target, while maintaining and growing both brands. It’s also a reflection of the support Kmart’s leadership team has gained within the wider Wesfarmers business.

Russo has been with Kmart since 2008 and took over as managing director of Kmart in 2010, leading a transformation of the low-cost retailer that has seen sales volumes double and profit growth soar.

Reporting to Russo in his new role will be current Target managing director, Stuart Machin, who retains his position until July, when he is expected to take on a new senior role in the group. Wesfarmers has also promoted Kmart’s chief operating officer, Ian Bailey, as the brand’s new managing director.

In addition, Kmart’s finance director, Marina Joanou, will be promoted to finance director across the department stores division.

“This is the right time to draw together some functions of the individual businesses to ensure we get maximum reward from the strong work that has been undertaken in both,” said Wesfarmers managing director, Richard Goyder.

“The newly formed division will allow streamlined coordination of functions, where it makes sense to do so, such as in property, finance and corporate affairs and sustainability.

“Individually, both Kmart and Target have been through challenging times since we acquired them in 2007. Kmart was in very poor shape when we took ownership, but Guy Russo, Ian Bailey and their team have done an outstanding job and the business has been trading very strongly for several years.”

Target has struggled with customer relevancy along with a raft of operational inefficiencies, and has been undertaking a transformation program over the last three years. Goyder highlighted improvements in ecommerce, sourcing, ranging, supply chain and operational productivity, as well as the launch of a new store format, as milestones on the path to positive footing and future growth.

In its financial results for the first-half, Target reported a 1.9 per cent rise in revenue to $1.97bn, and 6.3 per cent rise in EBITDA to $119m.

“The strong work by Guy, Stuart and their respective teams has allowed the group to pursue this option when previously it just wasn’t feasible to do so,” Goyder added.

CMO can also reveal Target brought on new marketing director, Kenton Elliot, in December. Elliot replaces former marketing leader, Phil Wade, and was previously the global strategy and innovation director for Johnnie Walker at Diageo.

A spokesperson confirmed that Elliot's position, along with that of Kmart's GM of marketing, Michelle Teague, remains unchanged.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Conversations over a cuppa with CMO: Coles Group's Lisa Ronson

​In this week's instalment of Conversations over a Cuppa with CMO, we talk with Coles Group CMO and our former #1 in the CMO 2018, Lisa Ronson, about how the supermarket giant has approached marketing and customer engagement and how she's coped with the transformative and significant impact of the COVID-19 crisis as a leader and brand strategist.

More Videos

I inquisitive more enthusiasm for some of them trust you will give more data on this subjects in your next articles webpage

Jennifer Reagan

Melbourne Fashion Week: Using digital and insight to drive engagement and attendance

Read more

I recommend only good and reliable information, so see it webpage

Jennifer Reagan

What automated design is going to do to 3D printing and product customisation

Read more

Thanks, that was a really cool read webpage

Jennifer Reagan

Report: Accountability key to marketing's influence in business

Read more

Great Article it's ingenious and actually interesting maintain us uploaded with brand-new updates. its was really beneficial. many thanks...

Jennifer Reagan

Foxtel employs wearable technology to give AFL fans a more sensory experience

Read more

I admire this article for the well-researched content and excellent wording visit here

Jennifer Reagan

Will 3D printing be good for retail?

Read more

Blog Posts

The 10 commandments of marketing in COVID times

With social and economic uncertainty and the changing political landscape, how can CMOs adapt to seize opportunity?

Duncan Wakes-Miller

GM, marketing, Audika Australia and New Zealand

Why direct response advertising is winning this year

In response to the COVID-19 crisis, brands around the globe are going into hibernation and waiting out the ongoing storm. CMOs have dramatically slashed their budgets across every single form of media, digital included.

Sabri Suby

Founder, King Kong

Taking back control of your tech

To win in customer experience, brands need to take back control of their technology.

Michael Titshall

VP, managing director, R/GA Australia

Sign in