Wesfarmers' (ASX:WES) Kmart Group's $480 million writedown

Company News

by Ortenzia Borre

Wesfarmers (ASX:WES) will make drastic changes to its under performing Target retailer.

The company said the actions include the conversion of suitable Target and Target Country stores to Kmart stores, the closure of between 10 to 25 large format Target stores, the closure of the remaining 50 small format Target Country stores.

Wesfarmers Managing Director Rob Scott said that these actions and further investment in Kmart will enhance the overall position of the Kmart Group, while also improving the commercial viability of Target.

As a result of the actions, expected in the 2020 full-year results, Wesfarmers reported a total of $780m of writedowns and expects restructuring costs and provisions in Kmart Group of approximately $120 to $170 million before tax and a non-cash impairment in Kmart Group of approximately $430 to $480 million before tax.

Shares in Wesfarmers (ASX:WES) are trading 0.03 per cent higher $38.89.