We'll make fashion giants regret ever entering Australia, Retail Catie Low Shopper Suhaib Fias at Target in Melbourne.Photo: Pat Scala 'It's fashion but not Armani or Jean Paul Gaultier ... its fashion with a little f.'
Guy Russo, Wesfarmers department store head warns Target's turnaround chief Wesfarmers department store boss Guy Russo warned the global fashion heavyweights a Target turnaround would hurt as he dumped in-store playgrounds and cafes and killed off the mid-year toy sale. 
He predicted a "clean" Target would crimp sales at the international chains such as H&M, which did everything right except for price. "I've seen clean models, H&M, Zara, Uniqlo ... they know how to do volume and fashion and do it with their own brands," Mr Russo said. "The only thing they are not doing right is they are overpriced.
If I can clean my model up, they will regret making the trip Down Under."
But behind Mr Russo's trademark showmanship, Target is harbouring a $100 million stock hangover in addition to the $145million cost to rebuild the business, called out as part of more than $2 billion in write-downs and restructure costs last month.
Target has already slashed prices on $200 million worth of stock this half, contributing to an expected full-year $50 million loss for the chain.
When Merrill Lynch Bank of America analyst David Errington asked why this additional $100 million in unwanted stock was not included in the $145 million restructuring cost, Mr Russo said it was not possible to provision for it at the time of the write-downs. He said this stock would be discounted over the next 12 months as Target was reshaped into a quality fashion, basics and soft home business.
"We know we have a bit of work to do to reclaim quality," Mr Russo said. "It's fashion but not Armani or Jean Paul Gaultier ... it's fashion with a little f. When we have the product right and product at an unbelievable price point, we get an unbelievable [sales] kick."
To drive this shift, Mr Russo said the business had rehired a 26-year Target veteran to head up design and quality and restore those core values to its product lines and brand.
The hot start to winter has hurt fashion sales across the retail sector and Target is no different, with Wesfarmers revealing its sales were up to eight weeks behind where they were expected to be at this time of year, adding to its ballooning stock overhang.
Target has already cut 240 roles from its Geelong head office and revealed plans to shift the operation to Melbourne as part of its merger of a number of back-office functions with Kmart, including property, finance and corporate affairs.
Applying what he learnt in transforming Kmart into Australia's discount department store star, Mr Russo is slashing product lines at Target, deleting a number of divisions such as a luggage and pet products, and cutting out the middle man in sourcing of private- label product.
The future of brands under the new Target looks less certain, along with its designer collaborations, apparel capsules that boosted the discount chain's fashion credentials with many shoppers.
"We haven't made any decisions about removing brands," Mr Russo said. "If they [designers] want to join the volume, low-price strategy I would welcome them."
Perhaps the biggest challenge after clearing unwanted stock is driving growth at Target without taking any sales from discount stablemate Kmart, a delicate balancing act many analysts doubt Wesfarmers will achieve.
Even Wesfarmers managing director Richard Goyder acknowledged Kmart's performance had contributed to the challenging trading conditions for Target.
"Kmart has been remarkably resilient through the decline in the currency and it's been quite a disrupter in its sector," he said. "Part of the reason Target has not done so well is Kmart's performance."