Wesfarmers' discount stores Kmart and Target to merge

The move will see Target folded into Kmart but isn't expected to impact the 452 stores across Australia and New Zealand.

Kmart Group managing director Ian Bailey said the two businesses, while separate, had been operating closely together for some time.

"The announcements [on July 24] are an internal reorganisation of our support offices and there are no impacts to the Kmart or Target stores," he said.

"With customers now demanding value more than ever, this new operating model will unlock a new level of scale and productivity across both brands, so we can deliver even greater value to our customers in the future.

"For store networks and 50,000 store team members - it's business as usual - as we continue to focus on providing the best value products to the thousands of customers in Australia and New Zealand who choose to shop at Kmart or Target every day."

Target was established in Geelong, Victoria in 1926 and is more than 40 years older than Kmart.

There are 128 Target stores in Australia, while Kmart operates 324 stores across Australia and New Zealand.

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Mr Bailey told the Australian Financial Review there would only be a "handful of redundancies" with no impact to workers on the retail floor.

"What we found was that running two businesses it was very, very difficult to get the tech into Target, and to get those benefits. This is really why we decided to push the two businesses into one," Mr Bailey told the AFR.

Wesfarmers' other businesses include Bunnings, Officeworks and Priceline Pharmacy.