Smiths City to be sold to investment company of Big Chill founder Colin Neal
Monday, 18 May 2020
Just days after announcing imminent redundancies and store closures, retailer Smiths City has been sold to Polar Capital, owned by Colin Neal, founder of the refrigerated logistics company Big Chill.
The sale includes all of Smiths City Finance and most of the Smiths City's stores.
About seven of the company’s 29 stores were not included in the sale and will close.
In an announcement to the New Zealand stock exchange, the company said jobs could be offered to approximately 75 per cent of Smiths City’s 465 staff.
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**
The sale has been valued at $60 million, however taking into account debt and other liabilities, the net amount expected to be received is $8m, according to the NZX announcement.
The sale is conditional on, among other things, Polar Capital securing finance.
Shares in homeware retailer Smiths City were placed in a trading halt for the second time in two months on Friday.
Smiths City chairman Alastair Kerr said the coronavirus had delivered a material and significant shock to the business.
'This shock has substantially shortened the time available for the turnaround programme that was the cornerstone of the company’s strategic plan,' he said.
'Faced with this shorter timeframe, it became clear that Smiths City needed to bring new capital into the business to drive the turnaround.'
Polar Capital’s Colin Neal said all Smiths City's commitments to customers would be honoured.
“Smiths City has been part of the New Zealand retail landscape for more than 100 years. It is a trusted brand that has been synonymous with providing great quality, excellent value and attentive no-nonsense service,' Neal said.
While the coronavirus has been blamed for Smiths City's difficulties, the retailer has been struggling for a number of years.
This story has been updated to correct Smith City was not placed into receivership