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Published 09 April 2013 11:32, Updated 26 April 2013 11:28
Wesfarmers has parachuted Stuart Machin in to try to make a go of struggling variety outfit Target. Photo: Luis Ascui
Kmart’s success appears to have come at the expense of its sibling store Target, with parent company Wesfarmers appointing its third new chief executive in five years in a bid to turn the red circle chain around.
Richard Goyder, chief executive of Wesfarmers – the Perth-based conglomerate that owns both stores – announced Stuart Machin as the new boss of Target on Monday.
Machin, who was previously stores development and operations director at Coles since 2008, replaces chief executive Dene Rogers after only 18 months in at the helm.
Before Rogers, current Billabong chief Launa Inman had the job.
The change in senior management comes as Target lags further and further behind its stablemate, Kmart. Both stores are pitched at the middle market, but Kmart has done far better at rebranding itself as a discount retailer offering good value for money on everything from tea kettles to bicycles.
Target, by comparison, has seen its return on capital and profits plummet. Sales and earnings for the 2012 financial year were the lowest in three years.
“Over the past few years, Target has faced difficult market conditions and a resurgent competitor in Kmart,” Goldman Sachs head of institutional sales Richard Coppleson told clients on Monday.
“Nevertheless, this business still generates over $3.5 billion of sales and $200 million in earnings before interest and tax – representing an EBIT margin better than a number of other Australian department stores.”
Machin was lauded by Goyder as an important player in the success story of Coles, Wesfarmer’s supermarket business.
“Stuart has been an important player in the turnaround story which has unfolded at Coles over the last five years,” Goyder says.
Stuart has been an important player in the turnaround story which has unfolded at Coles over the last five years.
“He has impressed everyone with his capacity to develop a successful, enthusiastic team with a strong focus on outstanding execution in stores.”
Machin will commence as chief executive this week.