Smiths City starts a fresh chapter with its new Lower Hutt store

Tuesday, 7 July 2020

Smiths City is looking for staff for a new Lower Hutt store, six weeks after announcing it would close seven stores nationwide, including one in Lower Hutt and another in Porirua.

The Lower Hutt store was the first new site to open after the retailer was put into receivership in May.

Smith City was subsequently sold to Colin Neal, founder of refrigerated logistics company Big Chill.

Neal set up a new business, Smiths City (2020), to take over the chain.

Smiths City has had a volatile first six months of 2020, but chief executive Tony Allison is excited about the new store opening.

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As part of the sale process, 115 staff were made redundant and Smith City stores in Mount Wellington, Porirua, Lower Hutt, Kapiti and Whangarei were closed, along with the Invercargill clearance centre and Christchurch outlet store.

The new store in Petone, Lower Hutt will open in late August.

Smiths City chief executive Tony Allison said the new store was a blank canvas for the company.

”For us, this is a better location. It's a high profile site, has accessibility and is easy for our customers to get in and out of. This is a good spot,” he said.

The former Briscoes building on Jackson St, Petone will become the new Smiths City store. Most recently, the building has housed discount retailer Go! NZ.

The new store will be next to Pak’n Save Petone and The Warehouse.

At the time of the company’s receivership and subsequent sale in May, Smiths City chairman Alastair Kerr said Covid-19 had a 'catastrophic' impact on the company, with the lockdown closure of its 29 stores for seven weeks preventing the company from turning around its fortunes.

Neal took over 22 of Smiths City's 29 stores.

First Retail chief Chris Wilkinson says businesses are increasingly focusing on regional stores rather than having a large number of outlets.

Allison said Smith City was a different company after it was purchased by Neal.

“We have the opportunity to invest in some systems that needed to be replaced. We have a new outlook in how we deal with people, and we have fewer constraints because we’re not publicly listed,” he said.

“We can come at this from a totally different angle and be pretty free to get on with what we think is the right thing to do.”

Smiths City wasn’t able to match the closure of its previous Lower Hutt store with the opening of the new site to allow staff to just transfer, he said.

However, the company would probably re-employ some of the local staff that had previously been made redundant, he said.

If the Lower Hutt store goes well then the company planned to open more new stores, Allison said.

He declined to say where any other new stores could be located.

First Retail chief executive Chris Wilkinson said the decision to open a new store in the suburb of Petone reflected a growing trend in regionalisation for brands.

“The reality is that Petone is a central location. So being able to exit those other sites was actually a very strategic move and allows them to focus on regionalisation,” he said.

Increasingly, retailers were closing stores in neighbouring suburbs to focus on one larger site.

“We have seen this happening with retailers like Michael Hill. They closed Johnsonville in deference to Porirua and closed Upper Hutt to focus on the Lower Hutt store,” Wilkinson said.

“Businesses are rationalising their representation and then concentrating customers into areas where they know they can create regional appeal,” he said.