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There Is Some Really Bad News For Kmart Fans

It's our go-to store for everything from homewares to clothing to food and everything else in between.

But we could soon see the end of Kmart A.K.A the greatest store ever.

Kmart is owned by Westfarmers, who also own their rival Target. Coincidence much?

Well a new report is claiming that the conglomerate must put Kmart up for sale in order to revive Target.

The planned transformation of Target can only be achieved at the expense of Kmart, according to broker Credit Suisse.

The sale of Kmart at its peak would also give Westfarmers the ‘flexibility’ to adopt some of Kmart’s pricing strategies.

"The profit history of Target, Kmart and Big W all illustrate periods of significant out-performance and underperformance," analyst Grant Saligari said told the Sydney Morning Herald.

"Largely, they have been playing a zero sum game."

"A solution to this apparent dilemma for Wesfarmers could be to sell Kmart and, arguably at peak valuation, and then set about trying to fix Target," Mr Saligari said.

"The approach has a reasonable chance of capturing the upside value of both businesses."

In order to become a bigger game player, Credit Suisse says Target needs to strengthen its ‘value’ proposition to put it in ‘closer competition with Kmart.’

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