H&J boss 'devastated' to close stores, but says it's necessary for the future

Monday, 8 June 2020

H&J Smith managing director Jason Smith at the Invercargill store on Monday.

Closing H&J Smith stores in the south is ''devastating'', but also necessary so the company's flagship Invercargill store can face challenges from a stronger position in the future, the company's managing director says.

On Sunday, Jason Smith confirmed its Te Anau and Balclutha stores would close at the end of July, affecting 17 jobs in total.

Its Gore store, which has been open since 1905, would be significantly downsized to a ladies fashion shop, with 23 of 27 jobs to go at the end of August.

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The Outdoor World at Remarkables Park in Queenstown would also be closed, affecting 10 jobs.

Decisions on the future of the H&J Smith stores in Dunedin and Mosgiel were yet to be fully confirmed.

Smith said it had been devastating to make the closure decisions, with affected staff reacting with a mixture of concern, sadness and anger.

He acknowledged the Gore store's significance and history in the town, and said he had known some of the staff for many years.

''I can assure you we are feeling quite hurt about it … but we had to make the decisions for the good of the entire company.''

The decisions were difficult to make because people were affected, but they were based around ''how do we give ourselves another 120 years of this business in the environment we are looking at,'' he said.

The company had been impacted by the Covid-19 pandemic but had also been grappling with increasing wage and compliance costs, an ageing store network in need of capital expenditure, difficulties securing supply, new entrants to the NZ market and the increasing dominance of multinational chains.

The numerous issues resulted in a perfect storm, he said.

''All these things have hit our business and we are looking to the future to try and navigate through this perfect storm.''

The Invercargill store, which would remain open, faced the same challenges, including competition from the new CBD mall being built.

But the company owned its Invercargill building, unlike the three H&J stores it was closing, Smith said.

Given this, it could make its own decisions on the likes of strengthening work and refurbishments as it saw fit.

''We have decided to close the other stores and come back to the Invercargill store to allow us to face these challenges from a stronger position.''

Gore District Mayor Tracy Hicks said the downsizing of the H&J store in Gore was devastating for staff and their families.

There was also concern among locals in terms of product selection once it was gone, he said.

The Gore District Council would be meeting with the owner of the H&J building in Gore, understood to be an Invercargill man, to get his thoughts for the building’s future.

Given the February floods and Covid-19, a taskforce involving Gore district councillors and staff would be looking to connect the business community and accelerate recovery, he said.

“In the midst of a crisis there is opportunity for businesses to step up.”

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