• Wesfarmers group stores Bunnings and Officeworks are doing a roaring trade throughout the COVID-19 shutdown, but are leaving the conglomerate’s retail offering behind.
• While Kmart remains profitable, “Target earnings have decreased significantly”, Wesfarmers wrote in an update issued to the ASX.
• It’s now been forced to fast-track a review as it bids to overhaul the business in a tough retail environment.
• Visit Business Insider Australia’s homepage for more stories.

Target has quickly become the dark sheep of the Wesfarmers’ stable.

While the coronavirus shutdown has funnelled shoppers into the conglomerate’s Bunnings, Officeworks and Kmart stores, Australians are still appearing to shirk its other retail offering, Target.

“Over the last two months, Bunnings and Officeworks have experienced significant demand growth as customers and their families spent more time working, learning and relaxing at home,” the company said in an update issued to the ASX.

“While Kmart remains profitable, Target earnings have decreased significantly.”

While lines form at Bunnings and impromptu home offices are assembled from Officeworks, the other retail stores are simply carrying on. For Target, which has long been a thorn in Wesfarmers’ side, that’s not good enough during this “uncertain and worrying time”.

As brick and mortar retailers grapple with how to survive in the age of COVID-19, Wesfarmers announced on Tuesday it would be fast-tracking its Target review, as it rushes to get its lone straggler into fighting shape.

“These plans include a review of a range of actions to improve shareholder returns and assessment of strategic options for a commercially viable Target,” Wesfarmers said.

In part, the fall in earnings may be due to a lack of adaptation made by Target stores that have been rolled out elsewhere.

“This includes the implementation of drive and collect by Bunnings and Officeworks, enabling contactless carpark collection by customers and the conversation of three Kmart locations to ‘dark’ stores to support its growing online business,” CEO Rob Scott said.

The acquisition of Catch Group, for example, has been one drive to online, with the online store making “pleasing progress”.

However, while helping bolster retail sales, the conglomerate appears to be quickly running out of patience with the runt of the litter.

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