The Invercargill flagship department store is actually 12 buildings all joined together. Photo / supplied
One of New Zealand’s longest-established retailers, H & J Smith, is to close all three remaining southern department stores with the loss of 220 jobs by November.
Jason Smith, H & J Smith Group managing director and a family member, said today the flagship Invercargill department store as well as the remaining shops at Queenstown’s Remarkables Park and Gore would shut then.
That spells the end of the department store operations of the retailer established in 1900 but some other operations will continue. Covid, a changing market and people moving away from shopping in department stores were cited, with the last trading day proposed to be November 18.
But Invercargill’s flagship H & J Smith Department Store needed major upgrades to eventually meet legal requirements for 100 per cent of new building standard. Although that wasn’t required for another 23 years, other changes were also needed to bring it up to standard and Smith noted significant alterations lately in Invercargill’s city centre.
H & J Smith in Invercargill is 12 connected buildings, constructed at different times. All have different seismic ratings which prevent subdividing the space for other tenants or uses, Smith said.
Stores in Dunedin, Mosgiel, Balclutha and Te Anau had already shut due to the pandemic and supplier constraints and the department store model was in decline here and around the world, Smith said.
Shopping patterns are constantly evolving and department stores were not the way people would shop in the future so access to the supply of goods was harder, Smith said.
Mitre10 MEGA Invercargill, Mitre10 MEGA Queenstown and Laser Electrical were unaffected and would operate as usual. They employ more than 260 staff. The business would hold discussions about the future of its Gun City, School Uniforms and Paper Plus shops in Invercargill, Smith said, citing “interested parties”.
Staff were told of the closures last night.
H & J Smith Group would now begin consultation with staff, funding counselling, emotional and grief support, career planning workshops, CV preparation, job-seeking help, financial and retirement planning and other assistance, Smith said.
“We have been honoured to have spent more than a century as an integral part of the Invercargill and Southland, communities,” Smith said.
“Over that long tenure, we have witnessed and adapted to many changes within an ever-evolving marketplace, and we have always strived to offer products and services to reflect the needs and desires of our customers.”
All employees had contractual provisions in their agreements for a paid work notice period of four weeks and redundancy compensation, based on a standard formula from the length of service, or, in some cases, a fixed payment. Those who had not met the qualifying period for redundancy would get that compensation anyway.
Some staff might be able to move to other H & J Smith Group operations.
Work & Income’s employer search showed the retailer got $2.2m in Covid support from the Government during the pandemic.
New Zealand now has only two independent department stores: Ballantynes and Smith & Caughey’s. But Smith said H & J Smith operated from a much smaller region than either of those.
Herald economics editor Liam Dann has reported how economic pain is about to get real as job losses mount.
Layoffs were revealed lately at MediaWorks, Today FM and Sky TV which announced 170 job cuts. The Warehouse is cutting 340 jobs, Xero is cutting 800 and Auckland Council’s austerity regime means about 400 people go.
American tech companies and banks have cut tens of thousands of jobs as they brace for recession, Dann noted.
Ken Young, First Union Southland organiser, said he was extremely saddened to see H & J Smith as a New Zealand-owned company employing hundreds of locals having to close its doors due to increasing pressure.
“Our members have achieved significant progress on wages in recent bargaining and will be devastated to see the announcement. We recognise that the company has put a number of measures in place to support employees and we will be calling on the Ministry of Social Development’s rapid response team to ensure that workers get the best level of support during this period. It’s important that these workers receive the same ‘just transition’ support as other workers losing their jobs in Southland,” Young said.
Chris Wilkinson of consultants First Retail Group paid tribute to H & J Smith which he said was one of New Zealand’s best retailers with its owners showing tremendous foresight in their business but courage now and compassion for staff in the way they were handling matters.
He expressed great sadness about the closures and said the business was one of New Zealand’s greatest retailers.
“The Smiths are such humble people. They’re some of the most experienced retailers in New Zealand, deeply entrenched in these three communities and give so much back.
“They’ve been successful because they’ve been able to read markets so well. But the challenges they face are simply insurmountable now. There’s no easy way around this. Globally, these scenarios are playing out with multi-generational retail businesses which were rocks in their communities forced to close due to the changing retail scene.
“Department stores like this struggle to retain the differentiation that sets them apart. More and more suppliers are going directly to consumers. Some of our more treasured brands are disappearing and there are big challenges in bringing buildings up to seismic standard with 12 buildings in Invercargill alone for this business,” Wilkinson said of the premises which are the chain’s headquarters.
H & J Smith had been in Nelson but shut there. It also had the foresight to see changes and shut stores in Balclutha and Mosgille in early 2020, Wilkinson said.
Before that, the business had already shut its larger-format Dunedin’s George St Meridian Mall store at the back of that centre.
“They made the right decisions at the right time. But they were also one of the first to move into the Mega Mitre 10 format and that showed foresight. That part of the business is very enduring and will remain so,” Wilkinson said.
On job losses, he expressed hope about re-employment for staff being laid off, saying Queenstown staff were in a good position but Invercargill also had a retail renaissance within the city centre. First NZ Retail has also worked extensively in Gore, he said.
“There are opportunities for people. Invercargill has a number of new retail and hospitality spaces, particularly with the new mall,” Wilkinson said.
But overall, he mourned the loss of such an established retail business which he said brought a distinctly southern magic to the retail scene. There was nothing in the north like that, he said. South Island retailers were entirely different to their northern counterparts, he said.
He remains particularly sad.
Fletcher Building, Spark and Ryman are potentially all on the radar.