1000 jobs go as Deka shuts shop

By SIMON HENDERY, LIBBY MIDDLEBROOK and CATHY ARONSON

Up to 1000 jobs are to disappear with the closure of the Deka department store chain, the country's third-largest retailer.

More than 1400 Deka staff were told yesterday afternoon that they would lose their jobs as Australian retail giant Foodland Associated closes the 60-store operation over the next few months.

Perth-based Foodland - which also runs Farmers and the Foodtown, Countdown and 3 Guys supermarket chains in New Zealand - has lost millions of dollars in recent years as Deka has fought a losing battle for customers with rival discounter The Warehouse.

Farmers Deka chief executive Nick Lowe has been reviewing the two companies' business since his appointment to the job late last year.

Yesterday, Mr Lowe said there was no possibility of improving the business. Instead, the company was putting its efforts into Farmers, the country's second-largest retailer behind The Warehouse.

Seventeen of the Deka stores will be refurbished as Farmers sites between May and July. The rest will shut permanently, most in July.

Mr Lowe said priority for filling about 400 mainly full-time jobs at the new Farmers stores would go to laid-off Deka staff.

Deka stores were closed after yesterday's announcement to staff, but were due to reopen this morning.

Mavis Penisula would have celebrated 20 years of working at the Invercargill Deka store as a cashier in July.

"I haven't quite made it, have I?" she said.

Mrs Penisula, who is on holiday in Auckland, found out about the closure after a phone call from her daughter, telling her to contact her store manager.

"It makes me pretty sad. I don't know what I'll do now," said Mrs Penisula, with tears in her eyes.

Most of the Deka staff will receive 13 weeks' notice and no redundancy payment. National Distribution Union secretary Mike Jackson said the lack of redundancy payouts "stinks."

He said Deka workers were covered by a redundancy clause until 1993 when the general staff contract changed under the Employment Contracts Act (ECA). Any workers Deka employed after 1993 were not entitled to redundancy.

Mr Jackson said many companies had removed redundancy clauses from staff contracts during the time of the ECA.

He was also disappointed by the company's refusal to guarantee Deka staff jobs at Farmers.

The Hamilton Deka store in Victoria St closed just before its busiest time and in 20 minutes at least 50 customers were turned away.

Vernisia Woolgar, aged 27, said she had shopped at the store for at least a decade and visited nearly every day, cutting through to where she worked. "It's sad. It's been there for so long. It's really strange."

She shopped for food, chocolate, lollies, clothes and lingerie.

Rhys Pollard, aged 28, said that when he was at high school Deka used to be a meeting point with his mates. They later worked part-time at the store to support themselves through university.

A self-confessed bargain hunter, 34-year-old Leanne Rapson, found the news so unbelievable that she rushed across the road from her office to make sure it was true. "I had to see it for myself. And there it is, it's all dark."