Exclusive: Target Tipped To Exit TV’s, Seiki Could Be Big Loser
As speculation swirls around the future for the Wesfarmers owned Target, ChannelNews has been told that the big discount retailer is set to exit the TV market due to slow sales and on some brands warranty returns.
One of the big losers will be the Seiki brand which is supplied by Sydney based distributor Ayonz who source the brand from mass Chinese TV makers many who simply put a known name on Chinese products.
During the last 12 months arch rival BIg W has moved to selling the same brands sold at leading consumer electronic retailers including TV’s from Sony, Computers from Apple and Lenovo and wearables, from Fitbit. This has led to sales growth.
At the same time Target has stuck to cheap Chinese products and house brands which has not worked for the mass retailer.
Seiki is currently the only TV brand ranged on the Target web site, other TV brands are sold at various stores.
Ayonz are also the supplier the Chinese TV’s branded Blaupunkt which is German in name only, Blaupunkt has not operated as a consumer electronics Company for nearly two decades instead they license the brand to stick on cheap made in China products.
Last year Ayonz claimed their 2019 Blaupunkt TV’s were Android TV capable despite them not being approved by Google.
The Company is now claiming that their 2020 TV’s are Google approved with the products now ranged at Bing Lee.
ChannelNews understands that Ayonz management recently held discussions with JB Hi Fi with a view to trying to get their 2020 range into the mass retailers.
One of the sticking points was warranty/return problems associated with prior 2019 Blaupunkt TV stock.
At this stage Target has not commented and we are still waiting for a reply from Ayonz management.
Recently Wesfarmers the owners of Target and Kmart openly discuss the future of Target claiming that they are accelerating a strategic review of Target following a ‘significant decline’ in sales that will hit profitability this year.
The Company said that sales at Target which are primarily based in closed down shopping centres have struggled.
In comparison archrival Big W has seen a surge in demand for goods during the COVID-19 lockdown especially consumer electronics and appliances.
In a trading update given to the ASX Wesfarmers Chief executive Rob Scott told investors that in-store sales momentum had moderated at Kmart in recent weeks and declined significantly in Target.
They said that both retailers were suffering.
“Given the high degree of fixed occupancy costs, a sustained decline in sales momentum will have a material impact on the profitability of Kmart and Target,” Wesfarmers said,
“In recent weeks, margins have also been impacted by higher levels of clearance activity and the increased cost of online fulfillment. While Kmart remains profitable, Target earnings have decreased significantly,” the company said.
Wesfarmers has accelerated plans to improve Target’s performance. These plans include a review of a range of actions to improve shareholder returns and assessment of strategic options for a commercially viable Target.
Wesfarmers have not denied that they plan to close down the Target operation.