The store will then begin its transformation into a small-format Kmart store, with conversion works due to begin on January 18, and a store opening on February 3.

Since Target made an announcement to transform the store network back in May, they have successfully converted 12 Kmart stores and opened 7 brand-new concept K hubs.

While official retention figures are still being finalised, Target has previously stated that Gunnedah employees will be offered jobs at the new K hub after its transformation.

Gunnedah chamber president Juliana McArthur said while it was a sad day for Gunnedah, it was great to have Kmart "step into the breach so we don't lose our local department store".

"It's fantastic that those employees are retained, because I know quite a few of them have worked for Target for many years - so they have retail experience - and it's good that Target is retaining them," she said.

Read also:

"It speaks to the whole 'shop local' push, and it fits with keeping our locals employed.

"Hopefully K hub will be a good replacement for Target... a varied shopping experience is a good thing for visitors to our area, as well as locals."

Gunnedah Target employees have been busy packing up and cleaning out the store this week with all stock massively reduced to go.

The new K hub will have a "bright and colourful" feel and be a one-stop shop for some of Kmart's most popular products across kids, home and clothing.