Some of Kmart’s cult Anko brand products will soon be sold in Target stores, the retailer has revealed.
Releasing its annual results today, Kmart and Target parent company Wesfarmers said it would introduce “select Anko ranges across hard home and general merchandise into Target stores” from early 2024.
A quarter of Target’s stock will be Anko products going forward, the company said.
Brian Walker, CEO of retail consultancy Retail Doctor Group told news.com.au the term “hard home” implies Target will sell Anko-branded homeware products such as decor items, small furniture and appliances.
He also said he expected Wesfarmers would create a range of Anko products that are exclusive to Target, rather than replicating those sold by Kmart as a way to create a “point of difference for Target”.
The news follows the expansion of the popular Anko home brand into Canada where it is now sold through retailer Zellers, and it appears more overseas buyers will soon have access to Anko with Wesfarmers revealing it is “seeking to selectively expand distribution of Anko products into new markets globally”.
The move to bolster Target with the Anko brand comes as its financial results show Target continues to struggle, amid criticisms it has gone too up-market and is no longer affordable.
The results show Target’s total sales increased just one per cent for the year to June 30, with a particularly poor performance in the six months from January to June, when total sales fell by seven per cent.
By contrast, sales at Kmart were up 22 per cent for the year.
In its results presentation, Wesfarmers said that Target “remains profitable” and had achieved a “relatively stronger performance in apparel” but described trading conditions for its range of homeware and toys as “challenging”.
Just weeks ago, it was announced that Target’s operations would merge with Kmart to create a $10 billion business.
Under the move, the two businesses will share back office functions while each brand will be retained and continue to operate separate stores.
But with the results showing that Kmart accounted for 79 per cent of the $10.6 million in sales the combined business produced for the year, speculation continues about the future of Target.
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Four Target stores were closed during the year to June 30, as the brand continues to shrink, having more than halved its number of stores in the past five years.
As Mr Walker told news.com.au: “Conversions of some Target’s to Kmart’s and the rationalisation of Target in terms of store numbers is how they’re trying to ensure the future of Target as a brand.”
He said that while Wesfarmers wants to continue to operate both brands, he thinks the future will hold “increasing conversions of Target stores to Kmart’s, particularly in high density areas, with Target to become more of a regional and online brand”.
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