Proposal to close six H&J Smith stores

Monday, 25 May 2020

Retailer H&J Smith are proposing to close four of its department stores and downsizing its Gore store.

South Island retailer H&J Smith is proposing the closure of six of its stores in a restructure that could affect 175 jobs.

Managing Director Jason Smith said under the proposal, the Dunedin, Mosgiel, Balclutha and Te Anau department stores would all close, as well as Outdoor World at Remarkables Park in Queenstown, and The Armoury Fashion Boutique in Dunedin.

The retail store in Gore would be downsized and Gore Take Note would be relocated, he said.

If the proposal goes ahead, the restructure would take place between August and February.

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The Invercargill H&J Smith department store, Outdoor World Invercargill and the Queenstown H&J Smith department store were not included in the proposal.

The company had been significantly impacted by the Covid-19 pandemic and needed to consider options for managing its business through what is anticipated to be a long and slow economic recovery, Smith said.

Meetings had been held with staff at every store about the proposal on Monday.

“Our retail division has been grappling with increasing wage and compliance costs, issues around store size and scale, difficulties securing supply, new entrants to the NZ market and the increasing dominance of multinational chains. None of which is dissimilar to the well-documented challenges facing department stores around the globe.

“We also have an ageing store network in need of capital expenditure to upgrade and modernise to meet future customer needs, which isn’t prudent given the ongoing uncertainty post-Covid.'

The final decision was expected to be made in early June.

“It’s been a particularly difficult couple of months for our staff with the challenges of Covid-19 affecting how we deliver service to our customers. They’re at the forefront of our minds as we work our way through this difficult process as quickly as possible to minimise further uncertainty for them,' Smith said.

The other businesses operated by the H&J Smith Group - Mitre 10 Mega in Invercargill and Queenstown, and Laser Electrical in Invercargill were not included in the proposal.