Smiths City staff were called into a meeting at 9am on Tuesday and informed of the decision.
All nine remaining Smiths City stores across New Zealand and its online shop have now been "temporarily closed for business" to assess the business's financial situation.
BDO New Zealand has been appointed as the administrator.
BDO said in a statement it aims to "reopen stores later this week".
"Despite closures of some stores and further downsizing measures, declining sales meant that the director of the company took the decision that trading could no longer continue," BDO said.
"The voluntary administration process aims to achieve the best outcome for all stakeholders.
"This may include selling the business and assets to interested parties."
Prime Minister Christopher Luxon has also weighed in on the Smiths City move, calling it "a real shame".
Luxon acknowledged the difficult trading environment for "bricks and mortar" retailers.
He said it was "sad news" during a tough time for retailers globally.
"It's a great Christchurch company that's existed for a long period of time. It's been a difficult time for them in particular.
"And so, you know, my thoughts are really with those workers, because that's been a Kiwi company from Christchurch, it's had its challenges over a number of decades, to be honest."
Smiths City customers who have paid deposits for purchases would be contacted directly by the administrators over the coming days.
In September last year, Smiths City merged its Colombo St outlet in Christchurch with its nearby store in The Colombo Mall.
The furniture and electronics retailer announced another downsizing last month, which included the closure of its Wānaka store.
It also recently shut stores in Nelson, Blenheim, Wellington, Palmerston North and Tauranga. The Dunedin store, which moved to Crawford St last year, was closed this morning.
Founded in Christchurch in 1918, Smiths City has been facing increasing financial pressure. At its height, it had 35 outlets.
Smiths City owner Colin Neal told The Post last month it has been "tough" in the retail sector.
"It’s the economy ... you don't buy a TV to eat. We've reduced staff at head office, we've reduced staff in stores. We’re just doing business as usual, trying to do best in our environment," Neal told The Post.
He said the downturn caught him by surprise.
"To be fair, I thought the market was going to improve (in) February, March of this year, and I don’t see any improvement for another year," he said.
"When I was in the transport industry, carrying refrigerated frozen goods, it was very recession-proof.
"Spending on whiteware, TVs and furniture is different. People are just holding their money. You don’t need a TV to eat."
Historic business with recent problems
Smiths City was founded in Christchurch by Henry Cooper Smith in 1918, and initially focused on agriculture and general goods, before focusing on furniture, and later electronics and appliances.
It was floated on the stock exchange in 1972 but was forced into receivership during the Covid pandemic.
At the time, it had 35 stores throughout the country and employed more than 450 people.
It was relaunched after being sold to the investment fund, Polar Capital, for $60 million in May 2020.
As part of that relaunch, the company underwent a significant rebrand and opened three new stores.
However, Smiths City's financial redemption was short-lived and signs of trouble began to re-emerge earlier this year with news of store closures.
-Allied Media with RNZ
