The Wesfarmers Limited (ASX: WES) share price is one to watch this morning after an after-market update from the Aussie conglomerate.
Why is the Wesfarmers share price on watch?
Wesfarmers last night provided an update on its Kmart Group plans. Kmart is one of the three key retail brands under the Wesfarmers banner, alongside Target and Catch.com.au.
The Aussie conglomerate is pushing to make Kmart a focal point of its brands. Key highlights cited by Wesfarmers include a large and growing addressable market, competitive advantages driven by scale and technology-enabled growth.
The Wesfarmers share price will be one to watch this morning as investors take in the latest update and vision for the group’s retail arm.
Kmart recorded $6.1 billion in annual sales through to 30 June 2020. That came from nearly 1 billion units sold in ~190 million transactions. The group’s online retail recorded more than 250 million website sessions during the year.
The Wesfarmers share price has been performing strongly to start the year. That includes a 7.8% gain in 2021 compared to a 5.0% gain for the S&P/ASX 200 Index (ASX: XJO).
Kmart is focused on a few things to drive lower costs and higher margins. Those include lower production costs, lower price, higher volume and stronger sourcing and product development.
The group is also expecting strong brand recognition and engagement to help drive sales. 10 years ago, the Kmart network had 187 stores across Australia and New Zealand. Now, the company is hoping to have 271 Kmart stores with 57 “K Hubs” by December 2021.
Wesfarmers is hoping the restructure of its retail arm can kickstart a new phase of growth. That makes the Wesfarmers share price worth watching in today’s trade.
Foolish takeaway
The Wesfarmers share price is on watch after the latest update on the Kmart transformation. Shares in the Aussie conglomerate are up 10 per cent in the last month in a positive start to the quarter.
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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