Target and Kmart will be merged into a dual-brand retail giant worth $10bn as the companies move to make the most of the cost of living crisis.
Wesfarmers, which owns both Target and Kmart, announced on Monday the management of the two will become one.
The change is set to only affect the internal management of the two brands, with back-end support officers to manage both retailers, a Wesfarmers spokesperson told NCA NewsWire.
Consumers and retail staff have been promised that there will be no noticeable changes instore.
Marketing director for Kmart, Ian Bailey, will stay on to run the enlarged enterprise.
Kmart chief executive John Gualtieri is set to run both stores day-to-day, while the brand’s financial officer Aleks Spaseska will take over sourcing, property and the dual-brand’s international supply chain.
There are also set to be a number of redundancies within back-end management, expected to be in technology and merchandise.
Mr Bailey said despite some job losses, the brands will “end up with more jobs in the business a year from now”.
“Kmart and Target are both strong businesses. I don’t see us doing this from a position of weakness. It’s quite the opposite,” he told the Australian Financial Review.
“I’d say we’re strong, but I think there’s an opportunity to really capitalise on this time and find ways to continue to deliver better value for customers.
“What we found was that running two businesses it was very, very difficult to get the tech into Target, and to get those benefits. This is really why we decided to push the two businesses into one.”
The rising cost of living may play into Kmart and Target’s hands as Australians turn to discounted products amid soaring prices.
“I see value being really front and centre for a long time,” Mr Bailey said.
“What we’re seeing is when we can consistently hit good products at great prices, then there’s plenty of demand out there.”