Wesfarmers boss Richard Goyder once described Target as the best business within the dishevelled Coles-Myer empire after his Perth-based conglomerate spent $18 billion scooping up a portfolio of businesses that included the supermarket chain, Officeworks and Kmart.
Oh, how times have changed. On Thursday, Target chief Stuart Machin - at the time of his appointment the third boss of the struggling retailer in 15 months - agreed with one analyst who described the business model as "broken", with a return to sales and pre-tax earnings momentum as much as three years away.
The recent full-year results for Target, which has launched a new marketing blitz using British fashionista Gok Wan, showed just how much pain the business is in, as fiscal 2013 earnings slumped 44.3 per cent to $136 million and sales went backwards by 2.1 per cent to $3.66 billion.
It was the only retail division within Wesfarmers to post negative earnings growth, with stablemate Kmart almost facing overheating cash registers as its pre-tax earnings jumped 28.4 per cent.
Mr Goyder on Thursday said his upbeat description of Target in 2007 was correct, with its headquarters in Geelong protecting it from the poor culture at Coles HQ in Melbourne. But the caravan had moved on.
"Now Target has got to change because the business it's in, which is on-trend fashion at affordable prices, that game has moved a fair bit in the last couple of years," Mr Goyder said. "If you think about Zara, Topshop, GAP and [the] online area, a lot is going on ... and the Target team will pull Target into making sure we are very competitive in that space and we are on-trend in fashion, and there is a bit of work to do."
He did not believe the business was "broken", with eight senior executive appointments to help revive the company's fortunes.
However, inventory problems that plagued Target earlier this year would spill into the new season, further exacerbating the retailer's dependency on clearance sales and pinching margins.
"We ... have too much winter inventory, we will have to clear that through - because of that we will get a delayed start into spring and summer and that will impact the first half of the year," he said. "But I'm already seeing signs in the business that ... quality things are happening and we will start seeing that later this year and in the following year, but it will take some time."