Target announced yesterday that its boss, Dene Rogers, was departing after only 15 months in the top job at the retailer.
Coles store development and operations director Stuart Machin will replace Rogers following the shock departure.
Wesfarmers boss Richard Goyder said Machin would review all aspects of the business, including the range of categories it offered under its apparel, fashion and general merchandise model, as well as its store footprint.
“Stuart will be high energy, and you only need to look at the change in Coles stores to see the impact he will have,” he said.
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“There have been quite a lot of questions about whether Kmart and Target can co-exist…they can.”
Industry sources told SmartCompany Rogers did not depart of his own volition and was not out in Target’s stores as much as he should have been.
Pressure was building on Rogers after Target’s flat full-year earnings for 2011-12 alongside the inclusion of a charge of $40 million for a restructure of its supply chain.
Nomura retail analyst David Cooke said he was not surprised by Rogers’ departure.
“Target is in the midst of a turnaround strategy and changing management in the middle of that is not ideal,” he says.
“It may lead to some tweaks to the strategy, but we believe the overall strategy is likely to remain intact.”
Cooke says the primary issue for Target is to identify the retailer’s proposition.
“Quite frankly, Kmart has taken the cheap and cheerful mantle. Where does Target fit in – is it going to move up towards Myer? It has to find its niche in the marketplace,” he says.
“Issue number two is that it seems the supply chain is not as cost-effective as it should have been and rectifying this is unlikely to happen overnight.”
David Gordon, partner at Bentleys Melbourne, says Rogers’ problem was that the management team he put together had gaps.
“He did not surround himself with the right management team,” he says.
Gordon says the resurgence of Kmart has also played a part in the performance of Target.
“There is an understanding in the market that Target has lost its way and strategically it needs to concentrate on deciding and then strengthening its positioning in the consumers’ mind,” he says.
“I think the store-level execution of the business over the last six months has been lacking in terms of incorrect range and the stocking and layouts of stores, whether that was due to ineffective execution or an out of line products strategy, I don’t know.”
Gordon says newly appointed Target boss Machin has a very good reputation even though he is a tough operator.
“From what I hear in the market place, there is a terrific level of respect for him both internally and from various suppliers,” he says.