Target, Kmart to shun heavy discounts on big-name brands

Came across this and thought it would be of interest here. The big name brands mentioned are mostly fashion/clothing. Not sure if this applies to other products. I read "everyday low prices" to mean cheap 3rd rate junk from whichever overseas hell hole pays people the least.

http://www.smh.com.au/business/retail/why-guy-russo-admires-...

Related Stores

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Comments

  • +6 votes

    This is where we'll see whether Russo has gone a bridge too far taking on the Target top job.

    His strategy for Kmart worked wonders, but if he thinks using the same strategy for Target will work he's got another thing coming. If Target moves in any way closer to the Kmart brand (cheap, home brand clothes and living essentials) he's just going to be robbing Peter to pay Paul.

    Hopefully he's got some better strategies up his sleeve for repositioning and revitalising Target.

  • +2 votes

    Wouldn't it be better for them to go a little higher and compete with Myers and David Jones? They are already pushing into that area with a few products? Whats the point of having two stores competing with each other?

    • +5 votes

      Russo seemed critical of that push, winding back some of the more exclusive brands and the concept stores with things like cafes in them.

      I actually see Target as a prime candidate to take on the likes of Uniqlo and H&M and focus in on fashion - cheaper but not essential fashion. Couple that with a strong digital strategy and you could have a real contender considering they already have a wider network of stores than the competition in this area.

      But all of the talk from Russo seems to point down the "cheap" path. And I agree with you, we have Kmart, we don't need another.

      •  

        this was my feeling about Target and fashion.
        Target got caught trying to compete with the high end and low end (kmart) they should have stuck with the one strategy.

    •  

      Designer brands are often picky with who sells their items. Picking the wrong reseller could cheapen their image/brand. I can't imagine Calvin Klein wanting to be associated with target.

  •  

    Target is supposed to be 'quality'?

    The reality is it's kind of stuck in the middle. It's quality is nothing special, it's prices are nothing special, it's fashion non-existent, it's range is limited, it's presentation is horrible. Target gives over a significant floor space to clothing, but still manages to stock stuff that gets a Kmart 'meh' at most.

    The interest thing will be when the supermarkets start stocking cheap clothes (like they do in the UK). Floorspace is limited, turnover high, and thus profits can be maintained at low prices. That cuts the legs from the likes of Kmart.

    In the end both the quality needs to rise, and prices need to be kept down. Above all, you can't have 'meh', or stock that doesn't move from one month to the next.

    •  

      Somes coles already stock mix branded clothes. A store I used to go to before moving had it all in the middle of the store. There was quite a large range for the floor space they had.

  •  

    I agree that target should try and go down the Zara/H&M/Uniqlo path and try to sell affordable but trendy clothes (plus toys, homewares etc - essentially a mid market Kmart). Kmart has the cheap end of the market locked down, and Myer and DJ's are struggling right now with their current pricing and sales strategy. Other than Kmart, retailers here don't really seem to know what they sell or what they're about. Eg why does Myer sell tvs, or any electronic goods for that matter?

    Retailers in the US are having the same problems with positioning, compounded by the fact that Amazon and Walmart are ubiquitous. I feel like half the reason Target and Myer haven't gone to the wall is because of the lack of competition here.

  •  

    http://www.smh.com.au/business/retail/its-bargain-time-at-ta...

    The full horror of the state of department store chain Target became clearer on Wednesday as its new management confirmed it will lose $100 million in the second half of 2016 and has to sell $100 million in excess inventory which hasn't even landed in Australia yet.

    http://www.couriermail.com.au/business/companies/massive-cha...

    TARGET will stop selling toys, pet care items and luggage, ditch in-store cafes and playgrounds and remove all loss-making items as new boss Guy Russo attempts to overhaul the business.

    •  

      Correction

      An earlier version of this story incorrectly said Target would stop selling toys. They are only culling their annual toy sales.

      • +1 vote

        I don't understand why they would stop the toy sale. How many people will do all their xmas shopping at Big W because of the til xmas layby. Huge loss of money. And yes I get the cost of holding stock etc but now that huge cash cow will go to a competitor.

  •  

    Yeah I heard the press conference & this is what I noticed, but more is being done but nothing too drastic from what I heard

    • Target will move to an everyday low price model (which they have already started)
    • Cut SKU's in Apparel & Remove Duplicated items
    • Brands will still play a vital role in Target
    • Season launch dates will change
    • Inventory is the biggest problem
    • It's a long term plan
    •  

      No toys is pretty drastic in my opinion. The main reason I went in there was to check toy prices, and often ended up buying kids clothes as well. No toys takes away my incentive to shop there. Although clearly I'm not their intended customer

      •  

        There will be toys there won't be toy sales

  •  

    I saw Kmart selling Everlast brand caps and accessories like that…