Target managing director Guy Russo's diagnosis of the discount department store's malaise is disarmingly simple.
"It has too much stock coming in the back door and not enough going out the front, and too much high-priced product," Mr Russo said at the Wesfarmers strategy day yesterday. 
"We're selling stuff at between $200 and $300 - nice product but it should be in a high-end -designer store." Mr Russo, who doubles as chief executive of Wesfarmers' department stores business, including Kmart, has been tasked with the same turnaround at Target as the one he led at Kmart.
Despite the two businesses rarely, if ever, achieving simultaneous prosperity in their long history, Mr Russo warned yesterday that global brands such as H&M, Zara and Uniqlo would eventually "regret making the trip Down Under".
But first there would be more turbulence to deal with, followed by a year of transition.
Target will make a $50 million loss this year, excluding the $145m in restructuring costs and inventory writedowns that it -announced last month.
More than $100m of yet-to--arrive seasonal stock will also be cleared in the first half of next year.
After that, Target would focus on profitable sales by moving to -direct sourcing of its product, making greater use of its Asian -office for sourcing, halving the product range to about 50,000 stock-keeping units and moving to everyday low pricing instead of regular discounting.
Mr Russo said the store network was evenly split between profitable, break-even and loss-making outlets, but the objective was to make them all profitable.
In doing so, Target sought to -increase sales by 10 per cent, achieve a profit margin of 10 per cent and raise its return on capital to 20 per cent.
Synergies with Kmart had yet to be identified.
"We just want to fix this thing first and don't want to infect Kmart," Mr Russo said.
Like his predecessors, the -department stores boss will have to minimise duplication.
Target, which has 316 stores around the country, will be pitched to all Australians, with its offering anchored in quality at low prices.
Kmart's market will be price-conscious families.
Mr Russo said he did not like closing stores and planned to -convert several Target stores to Kmart, with the first two flipped outlets due to open before -Christmas."I realise (the turnaround of Target) won't be easy, but I'm pretty confident we'll make this work," he said.