Target’s bizarre decision to axe its popular toy sale has cost the business $75 million and saw their sales drop by 22%.
Wesfarmers department stores chief executive Guy Russo, however, is standing by the move saying “We’re never happy with a less than positive result, but we are transitioning this business,”
When he was pressed further by a journalist on the idea of cancelling the toy sale and losing the online sales of mums and kids, Mr Russo said ‘“The toy sale is an unprofitable event. We costed it end-to-end. It involves six months of holding and managing stock and extended Christmas lay-by. In the long term it was the right thing to do.”
He went on to say that the store had decided to return to selling toys at low prices all day so customers can buy their toys at the same prices all the time.
However, the company has said that it was confident it would work but they don’t have a ‘plan B’.
“I’ve got 300 stores that knew how to win in this space about a decade ago. The only difference is a lot of new competitors are there now. We do need to set Target as a volume fashion retailer.
“Our products are ordered nine to 12 months out, so some of the changes to getting fashion and low prices right takes time. Confidence is the right word. The team is really wanting to get Target back to where it belongs and not be chasing the bottom end of the market.”