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Money Why Target is shrinking to take on H&M, Zara and Uniqlo

04:06  10 june  2018
04:06  10 june  2018 Source:   smartcompany.com.au

Target to close dozens of stores in 'boutique' shift

  Target to close dozens of stores in 'boutique' shift The chain wants to become smaller and more fashionable to take on H&M, Uniqlo and Zara.The brand, which has 305 stores across Australia, has been a problem child for the Wesfarmers retail conglomerate and the ugly sister to the group's department store powerhouse, Kmart.

Forget Big W and Kmart: discount department store Target wants to take the fight to international fast-fashion giants H & M , Zara and Uniqlo . Outlining a plan to revitalise the struggling retail chain on Thursday

Forget Big W and Kmart: discount department store Target wants to take the fight to international fast-fashion giants H & M , Zara and Uniqlo . Ebook: Cyber security: What every small business owner needs to know. Articles. Why you still need human contact in a digital business world.

Target© Provided by Private Media Operations Pty Ltd. Target

Forget Big W and Kmart: discount department store Target wants to take the fight to international fast-fashion giants H&M, Zara and Uniqlo.

Outlining a plan to revitalise the struggling retail chain on Thursday, Wesfarmers department stores chief executive Guy Russo said he’s no longer talking to the Target team about sister brand Kmart and Big W as their key competitors.

“H&M, Uniqlo and Zara is the thing we are going after,” he said at Westfarmers’ strategy day, which also revealed Wesfarmers’ plans for Bunnings, Coles and Kmart.

But to take on these global players, which each have a growing presence in Australia, Russo is thinking smaller.

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This fringed floral frock is an elevated take on boho chic. Striped Short-Sleeve Long Bra Dress. Uniqlo . Zara . This long two-tone knotted design is fashion-forward standout, and a subtle way to show some skin.

H & M , Zara and Uniqlo are three international clothing retailers with over 1,000 stores each worldwide. The competitive companies target similar markets but employ different strategies in their business models to manage the distribution of product lines.

Over coming years, Target will exit a number of unprofitable stores, aiming to reduce its physical store selling space by 20%, reports Inside Retail.

“It’s that problem the last four CEOs have been handcuffed by,” Russo said.

“Each site has been evaluated properly and when the lease comes up this time around we have to say to the landlords – we’re exiting.”

Russo told shareholders at the meeting that Target’s earnings have stabilised after a challenging few years, but as many as half of the retailer’s network of 305 stores remain unprofitable. It is hoped that reducing the overall selling space of Target stores will create a more profitable network overall.

Taking on the likes of H&M, Zara and Uniqlo will require a competitive fashion offering, as well as improvements in product differentiation and further use of online channels, said Russo.

Comment: Here's why supermarkets are getting smaller

  Comment: Here's why supermarkets are getting smaller Australian supermarket chain Coles will be spun off into a separate entity by owner Wesfarmers, the company said on Friday.If you think your local supermarket is shrinking, you might be right.

Weak spots: Uniqlo : Japan Gap: North America H & M : Nordic countries Zara : Spain. · All Uniqlo watch coverage [Racked] · Cheap, Chic, And Made For All: How Uniqlo Plans To Take Over Casual Fashion [Official site].

Zara , H & M and Uniqlo target the market segment of upper middle class. Nevertheless, both are well-known, which is why the company doesn’t need to look for prospects, but retain them.

Work is already underway on the fashion front, with new designers on board, and Russo said “we’re already dropping items similar to those three brands at around half their price”.

Wesfarmers has previously faced criticism for maintaining two discount department brands with very similar offerings in Target and Kmart. Dr Gary Mortimer, a retail expert and associate professor at Queensland University of Technology, has been one of those offering critiques.

“Kmart was simply cannibalising Target’s sales and Target didn’t have a clear position in the marketplace,” he tells SmartCompany.

From Russo’s comments, Mortimer says it appears the goal is to re-position Target into a “fast fashion, better value offer” and away from the “cheap and cheerful” offering of Kmart.

“You do need to to have two very clear market positions and communicate that with your target audience,” he says of the strategy.

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Meanwhile, H & M , Zara , and Forever 21 continue to plow ahead alongside Uniqlo in opening new stores in the U.S. Of its targeted 400 store openings for its 2014-2015 reporting period, H & M says most will be in CEO Nigel Travis talks with TheStreet on why the brand's outlook is still healthy.

Global fast fashion brands Uniqlo , Zara and H & M snared more than 0 million in sales from Australia's troubled discount department stores and local fashion chains last year but weird weather and the soft Australian dollar weighed on profitability. The international apparel giants are poised to take

But it’s not without risk.

“It is risky, however, to go and compete with global players who have the supply chains set up in such a way that they’re able to … constantly change and update their range,” says Mortimer, who says fast fashion shoppers are looking for new products every six to eight weeks.

“There are a lot of operational costs and supply chain restructuring that needs to go into place to meet those promises.”

Attempting to compete directly with the global retailers like H&M, Zara and Uniqlo would also be a risky strategy for SMEs, says Mortimer.

“For smaller retailers, particularly in fashion, footwear and accessories, you need to understand your point of difference and capture a local market,” he says.

This could involve showcasing local designers or offering different collections depending on where your business is located.

“Understand what your offer is, who your customers is, and curate an offer,” he says.

“Don’t try to replicate others in that space.”

Pram bandit mother-of-four is caught using her pushchair to steal baby’s clothes, bottles and $500 Dyson vacuum cleaner from stores including Big W, Lush and Target .
Mother-of-four Alicia Jane Larsen-Smith, 35, faced the Southport Magistrates Court on the Gold Coast charged with stealing. She stole clothes and vacuum cleaners and hid them in her pram.The woman received a suspended jail sentence after pleading guilty but avoided having to pay the money back.

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