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Target Stores Will Stop Toy Sales In A Bid To Increase Profits

Target has announced they will stop toy sales, pet care items and luggage, drop in-store cafes and playgrounds and remove all loss-making items as new boss Guy Russo attempts to overhaul the business.

Mr. Russo spoke at the Wesfarmers annual strategy briefing saying he has been given the task of fixing Target’s poor sales figures. Russo is the man responsible for turning K-mart into a profit powerhouse and hopes to of the same with Target.

The aim is not to close stores but rather change the way they sell. “I don’t like closing stores,” he said. “Unless there is a lease coming up in a year or two with a really bad store we’d look at it, but I’d like to try to reset this business.”

Mr. Russo

Russo, who is a former Kmart and McDonald’s boss said he will be focusing on getting rid of items that are not selling well and cutting waste.

He has vowed to turn Target around with a $145 million restructure of the business, which will most likely lose $50 million this year due to a massive winter stock clearance and lower gross margins.

“I’ve got a profit problem,” he said. “I’ve got $3.4 billion worth of revenue and giving none of that back to anyone. Step one, you take $1 through the till, you’re meant to give five cents back to someone. Not zero or negative.

“I’m fortunate that we’ve got that revenue. Now I’ve got to teach the team that instead of driving an Uber Black, maybe take the tram. We’ve got to get rid of costs that pre-restructure were taking 1 or 2 per cent of EBIT.”


Getting rid of times from Target will have to be done slowly and strategically as orders are done a year a before they hit the stores.

“Exiting categories out of a department store needs to be done properly because you’re buying a year in advance,” he said. “But we’ll be starting by exiting toy sales. Pets will go. Luggage will go. We want to increase the volume on apparel and soft home.

“We’ll exit cafes and give that space back to apparel. There are playgrounds in the children’s area. If a customer wants a playground we’ll suggest they go to the playground.”

Target, very much like K-mart has done, will be lowering prices to push through more volume thus reducing inventory and options and increasing stock of all-year basics. They will also stop selling items that are not making a profit.

“We will not sell products that do not make money,” Mr Russo said. “We’re lowering our prices to sell volume. Volume is critical to driving sell-through, lowering sourcing costs and further lowering prices.”


Chrystal Lovevintage

Chrystal Lovevintage

Chrystal is a writer and blogger who loves nothing more than watching back to back episodes of crime shows. Should she ever find herself needing to cover up a crime, she'll know exactly what to do! Her dream is to one day live in Palm Springs where she can do her writing poolside while drinking endless gin and tonics. Mum to the cutest twin boys in the world, she loves nothing more than the sound of their laughter (usually heard when they're conspiring against her). Entertainment writer and pop culture junkie, she will be bringing you all the celebrity gossip and news that your brain can handle. You can follow her blog at and on Instagram at Chrystalovevintage

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