Smiths City will shut its Hornby store next week, with owner Colin Neal blaming tough trading conditions and a dramatic fall in spending across big box retail.
Neal confirmed the store would not be renewing its lease, with the final day of trading set for Monday 25 August.
“It’s very tough market conditions. People are just not spending in big box retail. Our foot traffic is very low, and it’s just the market, that nobody has any money at the moment,” he said.
“It has been like that for the last three to six months. Every store, ours and our opposition, has been dramatically reduced in spending. It could be in the 40 to 45 percent market.”
Neal, who bought the company five years ago, said the downturn had caught him by surprise.
“To be fair, I thought the market was going to improve 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.”
The closure of Hornby adds to a list of stores the company has wound back this year, including Nelson, Blenheim, Wellington, Palmerston North and Tauranga.
In Christchurch, Smiths City is now operating only from Northwood and The Colombo Mall after closing its flagship Colombo Street site last year.
“Our footprint is just too big for the current retail market and also retail exchange. You’ve got the internet now, and we don’t need the big footprint of 6500 squares. That’s what the flagship store was. We don’t require three or four stores in Christchurch,” Neal said.
“The view was with Hornby it was a new store and had an opportunity to get out. The lease expired, so we’re just going down to two and giving a better experience in the stores.”
Neal said many of the leases signed when he purchased the company were now coming to an end.
“When I did purchase Smiths City, we had leases lined up for five years. A lot of landlords gave you five years or three years, and this is why they’re all coming to the end of the lease. You make decisions, don’t you? It’s commercial.”
Asked how he felt about closing the store, Neal said it was never easy.
“As you know, I like to rescue businesses, and I’ve put a few of them on the table in 2020. I feel sad for a lot of people. That’s a family business that’s done a lot of hard work, and it’s very sad to see that one in particular go.
“But there’s others going, there’s hospitality, there’s cafes closing, and all these people put hard earned money into it, and it’s gone.”
Neal said interest rate cuts had not provided the immediate relief retailers needed.
“Everybody says the OCR comes down. It’s quite a lot of noise in my ears. People don’t fix mortgages, it doesn’t make effect to them today. We need things that make effect immediately. If the economy doesn’t get better, there’s going to be more carnage.”
For now, he said the focus was on keeping the remaining stores running.
“It’s week to week, month to month. All I wish is the economy and people start spending. That would be a positive, but I see no signs for another 12 or 14 months.”
Hornby Councillor Mark Peters said “I’m saddened to see the Hornby Smiths City store closing, it was a great addition to our Hornby community and they will be missed, a sad sign of just how tough the economy is right now, thanks to the team at Smiths City Hornby.”
Hornby Community Board Candidate Cody Cooper said on Facebook “I’m saddened to hear that Smith City Hornby will be not renewing their lease and will be shutting down.
