Smiths City has negotiated a conditional agreement to sell the business in a transaction that values the assets at around $60 million.

The sale involves the acquisition of all of Smiths City Finance and the majority of Smiths City’s stores.

The company said approximately seven of the company’s 29 stores will close as a result.

A spokesman told Chris Lynch the company is hoping to comment on the future of the Christchurch stores by the end of the week.

Smiths City Group was founded in Christchurch in 1918 by Henry Cooper Smith who purchased 550 Colombo Street, Christchurch, formerly Ward & Company City Brewery, and commenced business trading as The City Market.

The final number of stores to be sold is dependent on the lease transfers and new lease terms being agreed for those transferring stores.

The purchaser is Polar Capital, a business owned by Colin Neal, founder of the refrigerated logistics company Big Chill.

In addition to acquiring the stores Polar Capital has also committed to taking over certain other liabilities. These liabilities include commitments Smiths City has made to customers that have paid deposits for, or are awaiting delivery of, goods.

Employment will be offered to approximately 75 percent of Smiths City’s 465 staff.

Smiths City Chair Alastair Kerr says “as we signalled at the end of March and earlier this month, the Covid-19 pandemic has delivered a material and significant shock to the business.

“This shock has substantially shortened the time available for the turnaround programme that was the cornerstone of the company’s strategic plan.”

“Faced with this shorter timeframe, it became clear that Smiths City needed to bring new capital into the business to drive the turnaround.”

Alastair Kerr says “in addition to taking steps to preserve cash and contain costs in the face of these new trading conditions, the Board has explored numerous options to secure an injection of new capital.”

“These efforts have included discussions with our existing largest shareholders, and other potential strategic investors, to underwrite a broader capital raising. We have been helped throughout this wide-ranging process by our advisers PwC.”

“However, it has now become clear that the transaction we have announced today offers the greatest opportunity for Smiths City to endure for the long term. It also offers the greatest opportunity to protect the jobs of as many of our staff as we can in this uncertain time. We are hopeful that under new ownership Smiths City will prosper.”