Coronavirus: Job losses and store closures likely at Smiths City
Wednesday, 6 May 2020
Closure of some stores and job losses at retailer Smiths City are likely as the company flags a total restructure.
The furniture and electronics retailer told shareholders on Wednesday that it expected consultation with its 465 staff and its landlords to take just over two weeks, after which the board would decide on the final plan.
Smiths City chairman Alastair Kerr said while it was likely the restructure would result in the closure of some stores and job losses, the final outcome was dependent on how the consultation and negotiation process unfolded.
“The decision today to start this process has been hard. Smiths City has long benefited from the support of a loyal customer base as well as a committed team that has frequently gone the extra mile to meet customer demands and support the Smiths City brand.''
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The company, which has struggled for profile in its crowded categories, announced in March that it was talking to potential key investors while assuring shareholders it retained the support of its bank.
Kerr said talks with investors continued but ''from the analysis the company has undertaken, a restructuring is clearly necessary in order to secure investment and have a sustainable, post-pandemic retail business''.
Even thought the company had been open for online sales of essential items at Level 4, it had not been enough to make up the shortfall in sales, and the company feared there was subdued trading ahead.
Kerr acknowledged that staff had borne pay cuts through the lockdown and said the company was grateful for the sacrifices made ''and we regret having to take further action to ensure the future for the business''.
Smiths City was founded in Christchurch in 1918 by Henry Cooper Smith, whose business the City Market auctioned grain, livestock and general goods, before specialising new and used furniture and hardware.
It currently has 30 stores across the country.