Could Kmart pick up Dunedin site vacated by The Warehouse Group?

Wednesday, 10 June 2020

The Warehouse Group is proposing six store closures on top of three already confirmed, which could result in 1080 job losses.

It is not clear what will happen to the retail spaces left vacant by the departure of The Warehouse.

The one exception to this could be the central city site in Dunedin, First Retail managing director Chris Wilkinson said.

On June 8, The Warehouse Group announced it was looking at closing nine stores across the country, with up to 1080 job losses.

The closures included the Noel Leeming Henderson Clearance Centre, and Tokoroa store, The Warehouse Whangaparaoa, Johnsonville and Dunedin central stores and the Warehouse Stationery Te Awamutu store.

The Warehouse's departure could leave big shopping spaces empty with few comparable retailers able to fill the void, he said.

It was rumoured that Kmart was interested in The Warehouse's 39 Maclaggan St site.

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The reopening of Dunedin's Kmart has been delayed.

'The big issue in Dunedin is there is not a lot of space for bulk retail to be developed. Dunedin has planning restrictions which supports the primacy of the city centre,' Wilkinson said.

Wilkinson said Kmart could look at the site as a plan b if it was unable to stay in its current location.

Kmart's Meridian Mall store remained closed during level 2.

It was unclear when the store would reopen, and whether it would stay at that site long-term.

'There is always speculation that a company might want to pick up sites that others have exited but there is always a reason why those organisations exited in the first place,' Wilkinson said.

'If you look Johnsonville, where you have significant long-term uncertainty around the area, challenges around addressability, scale issues that The Warehouse has had. Other retailers are not going to jump in.'

Wilkinson said it was unlikely the vacated sites would be used as retail in the near future.

'Most of the big retail businesses are being cautious about their developments at the moment. Those spaces are more likely to be used for entertainment like spaces, so kid gymnasiums and that sort of thing,' he said.

'You have to think about why The Warehouse exited; they might not be suited to retail.'

Dunedin real estate expert Liz Nidd said she had not heard the rumours regarding Kmart, but she wasn't entirely surprised that The Warehouse was looking to leave the central city site.

'Our office is literally 100 metres up the road from the store and I go in there from time to time and it never seems very busy,' she said.

Kmart has been approached for comment.