Geelong not viable for Target: Russo

Target has to move its headquarters from Geelong if it wants to remain competitive, the embattled discount retailer's new boss says.

Guy Russo, who was appointed the head of Target and Kmart in February after parent company Wesfarmers created a single department stores division, said hard decisions have to be made to ensure Target is profitable and sustainable.

Among those tough decisions is moving the head office to Melbourne and ending Target's 90-year link with Geelong.

"The Geelong site for the national office is no longer a viable option if we're to remain competitive and build a profitable business ...," Mr Russo said in a written statement on Friday.

"We have yet to identify an appropriate site, however we are looking at hopefully securing a site that is on the Geelong side of the Westgate Bridge or nearby, close to public transport and a retail hub."

He said the relocation would take some time and is not expected to happen within the next 12 months.

Staff have been offered voluntary redundancy packages, the take up of which will determine the number of job losses, the company said.

"Where appropriate, we will explore avenues for potential redeployment opportunities within the Kmart, Target and broader Wesfarmers businesses," Mr Russo said.

The Australian Services Union has condemned the announcement, saying it follows significant refurbishment of the Target Geelong headquarters under the previous managers.

"It is utterly reprehensible that workers at Target are the ones paying the price for the highly questionable business practices of the former management team with suppliers, aimed at boosting profits," ASU Victorian spokeswoman Ingrid Stitt said.

"We fail to see how relocating to Melbourne at great expense will help turn around the company."

Former boss Stuart Machin, who had been tipped for another senior role at Wesfarmers, stepped down a week ago after it was discovered Target had struck deals with suppliers that artificially inflated its first-half results.

Mr Russo's elevation from Kmart managing director to chief executive of Kmart and Target was already in the works before the scandal broke in March.