Mayor urges retailer to reconsider closure plans

H&J Smith chief executive John Green in the Dunedin store in the Meridian Mall last week. PHOTO:...
H&J Smith chief executive John Green in the Dunedin store in the Meridian Mall last week. PHOTO: GERARD O’BRIEN

Dunedin Mayor Aaron Hawkins is encouraging retailer H&J Smith to reconsider closing the doors of its department stores.

H&J Smith Group announced yesterday it was proposing to shut its stores in Dunedin, Mosgiel, Balclutha and Te Anau and its Gore store could be reduced in size. About 175 staff would be affected.

The Invercargill and Queenstown shops would stay open.

The Armoury Store in Dunedin and Outdoor World in Queenstown, owned by H&J Smith Group, would also close.

The Take Note store in Gore would relocate.

Aaron Hawkins
Dunedin Mayor Aaron Hawkins.

Mr Hawkins said he hoped H&J would access Government support and avoid shutting shops.

‘‘Proposal or not, this will be a stressful time for staff and their families. Our thoughts are with them,’’ he said.

The company said the lingering impact of Covid-19 had led to the proposed changes.

The proposal was now under consideration and a final decision would be made in early June.

The closures and downsizing could occur from August this year through to February 2021.

Clutha Mayor Bryan Cadogan said the series of proposed closures were a blow to the lower South Island.

‘‘It’s a blunt reminder that we need to be shopping locally.’’

Bryan Cadogan. Photo: ODT files
Bryan Cadogan.
The Clutha community would rally to provide support for staff in the coming days, he said.

H&J Smith was established in 1900 as a drapery store in Invercargill. It grew to be one of New Zealand’s largest privately owned retail companies.

The Dunedin store is an anchor tenant in the Meridian Mall. It delayed its reopening by a week when shopping restrictions were relaxed under Alert Level 2 because of seismic strengthening work needed at the mall. That reopening might now be short-lived.

Kmart also delayed its reopening at the mall.

H&J Group said cutting the size of its retail division was proposed to secure its long-term future.

Managing director Jason Smith said the company had been significantly affected by the Covid-19 pandemic.

“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 New Zealand market and the increasing dominance of multinational chains,’’ he said.

“We also have an ageing store network in need of capital expenditure ...’’

Pursuing upgrades would not be prudent given ongoing uncertainty post-Covid, he said.

“H&J Smith has been in operation for 120 years. To be here for 120 more, it’s now very clear we need a long-term view.’’

Mr Smith said consolidating operations back to the Invercargill home base should secure a viable future for the company.

“I want to acknowledge all our staff, customers and suppliers who are impacted by this proposal,’’ Mr Smith said.

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.

H&J Smith

Shops proposed to close:

Dunedin, Mosgiel, Balclutha, Te Anau

Shops set to downsize:

Gore H&J

Shop set to move:

Take Note, Gore

Other shops proposed to close:

Armoury Store, Dunedin; Outdoor World, Queenstown

Staying open:

H&J Smith, Invercargill and Queenstown

Number of staff affected:

175

Timeframe for possible closure and downsizing:

August 2020 to February 2021

Comments

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Oh NO.
PLEASE stay.
We WANT you to stay.
Why won't you listen to me !?!
I'm THE Major !!!
I always get what I want.
I'm always right.
I am the next generation. I am the future. I know what is best for everyone.
Why won't YOU listen ?!?
Please stay.

Ha! It would be funny if it was not for the fact that every time he opens his mouth it costs ratepayers more money or sends the city further into debt! What I want to know is why the article starts with what Hawkins wants rather than the devastating news of job losses?

Pat, I wasn't trying to be funny.
I was highlighting the attitude of this mayor and the Dunedin Undemocratic Non Council of Elites (DUNCE) driving us further into the ground.
You are correct.
As always, it's all about what Hawkins, supported by his pet elites, WANTS, not about the devastation that has just started to fall on our beloved city and people.
We need a shovel to dump them on the dung heap they belong before they drown us in dept, leaving us unable to do the essential tasks that need to be done.

Contrary to what Mr Cadogan believes, such closures are actually a "blunt reminder" that "buying local" is not in anybody's interests. We've known this for over 200 years, so it's surprising it still hasn't sunk in.

Wow, are you really so old?

Sorry Aaron, as a private business H&J's can't just tap more ratepayer money to keep going, they rely on customer throughput and spend to keep going, something that is a fine balance especially after the covid. This is just one reason why you should leave the CBD alone, and return anything you've messed with back to how it was before you stv'd into your office, or resign and let the next guy fix your green mess.

Unfortunatley reliance upon government subsidies is a poor business model Mr Mayor

The reality is there was no cash in the coffers of these stores that are falling like flies. On paper they looked profitable but the accountants that are hired know how to "work" the numbers to make them look good. Combine that with not having a 1 month buffer of no income.

The economic implosion is tragic. Over leveraged businesses (hint hint Dunedin stadium) combined with ridiculously overpriced rental / real-estate is leading to deflation. Exhibit A: Unrealistic real estate and debt. The shiny new UN migrants will take debt and overpriced houses, exacerbating the problem. Begging won't help. Perhaps praying, but the churches are still shut.

We are starting to seeing the economic impact of years and years of neglect by previous mayors and the DCC. The pandemic has pushed things over the edge and these people have no plan. Focusing on tourism is not a realistic solution. The government at the National level knows that tourism won't recover fully in the next decade. International borders won't open until late 2021. Focusing on domestic tourism sounds good but represents a drop in the bucket towards recovery. NZ has more tourists than it has citizens. Unemployment and economic strain makes domestic tourism an illogical investment or focus for recovery. Creating a walking street is an utter waste of money. Construction of shops and dining on the harbor makes more sense but will never happen because members of the DCC have a financial interest in upgrading the CBD with a walking street. Again, the mayor and DCC need to go. Sign the no-confidence petition at the following URL: https://www.petitions.nz/contact/267924

When will Hawkins and his useless bunch of sycophants get the message and listen to those who actually work for their living. Get real Mr unwanted mayor, either do the job we need or go.

Unlike this "council" places like H&J Smith can't keep gouging their customers like the dcc gouges their ratepayers, I would have thought hawkins and co would have woken up by now with all the negative feedback.....seems not.

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