Prime Minister Christopher Luxon has described the closure of Smiths City stores as “a real shame,” after the Christchurch-founded retailer was placed into Voluntary Administration.
As first reported by Chris Lynch Media, Smiths City was placed into voluntary administration, with all stores closing their doors.
In a statement earlier today, BDO New Zealand 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. The Administrators are calling for urgent expressions of interest.
“As of 8.30 a.m. this morning, all nine Smiths City stores and the online shop have been temporarily closed for business so that the Administrators can undertake an urgent assessment of the Company’s financial position and confirm the appropriate next steps. The aim is to reopen stores later this week.
“The Administrators appreciate this is an unsettling time for everyone at the Company, and they met with staff this morning to explain the process going forward.
“Customers who have paid deposits for purchases will be contacted directly by the Administrators over the coming days.”
Luxon said “It’s a real shame. It’s a great Christchurch company that’s existed for a long period of time, and I know it’s been a difficult time for them.”
He pointed to the wider challenges facing retail.
“In particular, it’s a difficult time for retail. The combination of what’s transitioned in New Zealand with online shopping relative to bricks and mortar, many retailers are wrestling with that, not just in New Zealand, but all around the world.
“My thoughts are really much with those workers, because that’s been a Kiwi company from Christchurch. It has had its challenges over a number of decades, to be honest, but this is sad news.”
Smiths City was founded in Christchurch in 1918 and is a long-standing name in New Zealand retail, selling home appliances and furniture.
The company has been under increasing financial pressure, with sales continuing to fall despite store closures and downsizing measures.
Last month Smiths City shut its Hornby branch, with company director Colin Neal warning of tough conditions across the sector.
“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,” Neal told chrislynchmedia.com at the time.
“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 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.”
