Smiths City launches new brand and plans five new stores
Wednesday, 28 October 2020
Smiths City Group says it will open five more stores next year as part of a rebranding unveiled at its new flagship store at The Colombo Mall in Christchurch.
New owner Colin Neal bought the 102-year-old business in May after it went into receivership, and it has since closed eight loss-making stores and opened four new ones.
Neal said future expansion would focus on the regions with stores dropping the word “city” from their name, instead including the names of the towns and neighbourhoods where they were located.
“We’re not big city. Our most successful stores are not big city, they are regional heartland New Zealand.
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**
“We just see ourselves as locals within those cities; knowledgeable and a straight-talking bunch of Kiwi good buggers.”
The new store in The Colombo mall in Sydenham is only a few hundred metres from Smith City’s former flagship store in Colombo St, and both outlets will remain open at least until the original store’s lease ends.
The purchase of Smiths City by Neal’s company Polar Capital was a major change in direction for the businessman, who established Big Chill Distributors which he sold to Freightways.
He also has stakes in Moa beer and Mercer Stainless, as well as owning health and beauty distributor Pricewise, which also has a shop in The Colombo Mall.
Neal said Smiths City has been on his radar for a while, and he had initially intended just buying some shares, before deciding to buy the whole business.
“I had been looking at Smiths City for two or three years from a share price point of view, and I like under-valued businesses; I’ve studied Warren Buffett and they call me Colin Buffett.”
Sale negotiations were conducted over Zoom during lockdown and Neal bought the business without being able to visit any of the stores.
He is keen to stock more New Zealand-made furniture and said Smiths had already looked at how it could reduce costs for local manufacturers to get the price down.
“One was to have no reps on the road, sole supply us, put it through our warehouses, it takes the onus off manufacturer, which is cost.”
Smiths City chief executive Tony Allison said Covid-19 meant supply was a bit of an issue for some imported products.
“There’s a lack of containers, border issues, for example some of the upholstery is just taking time to get in.”
But the pandemic meant people were buying more because they were spending more time at home.
“They’re replacing the lounge suite, replacing the bed and buying a new TV, because you’re in your nest and you need to make it comfortable when you’re not going on overseas trips.
“Money is not pouring out of the country the same, so they’re spending it.”
Smiths was also attempting to cater for changing tastes and lifestyles as more people lived in apartments or downsized their homes.
“We’ve got beds you can get into a bag.
“The catchphrase we have now is, ‘We kit out Kiwi homes.’”
Allison said there would also be a change in approach. “We won’t sell you something because we’ll make more money from it, we’ll sell you something because we know it’s the right thing to do.”
The change in store colour scheme reflected that culture change, with more black and a lot less “shouty” yellow, he said