Smith & Caughey’s set to close: Department store falls victim to cyberattack on day of proposal to close for good

Prestigious Auckland department store Smith & Caughey’s has fallen victim to a cyberattack, on the same day it announced it proposed to close in early 2025, after 144 years, with the loss of almost 250 jobs.

The department store said today it was facing an “unprecedented challenge” to try to overcome the attack which has affected internal computer systems.

It described it as a “significant cyber security incident”.

“On what has already been one of the most difficult days in our 144 years of trading, our server and retail operations systems have been crypto-locked,” said Smith & Caughey’s chairman Tony Caughey.

He said it was a “live incident”.

Smith & Caughey's Queen St store has operated for more than 140 years. Photo / Michael Craig

“We have activated a response plan, and we have a team of experts working to resolve this incident.”

Smith & Caughey’s two retail stores - in Queen St and Newmarket - would be closed in the interim.

The company’s website is not affected and is open for business.

“The attack has impacted our ability to communicate with our staff, customers, suppliers and other critical stakeholders. We are trying to reach out to them to explain the situation and the reasons for the communication delays,” said Caughey.

Smith & Caughey's chairman Tony Caughey in the company's flagship Queen St store in Auckland.

“This is far from ideal and does not reflect how we usually communicate with this crucial group of people who are very important to our business.

“We apologise for any inconvenience caused and appreciate the understanding and patience of our customers and business partners during this challenging time.”

Many Aucklanders are mourning the pending loss of Smith & Caughey’s after it presented the proposal to close to its almost 250 staff yesterday.

The proposed closure of the 144-year-old business — including its prestigious and historic “Grande Dame” Queen St store — has been caused by a “perfect storm” of factors, say its owners.

Smith & Caughey’s — famous for its upmarket brands, customer service and globally acclaimed Christmas window displays — has been a landmark, physically and culturally, in the city since Marianne Smith (nee Caughey) established a drapers and millinery shop in the city in 1880.

Smith & Caughey’s stores in Queen St and Newmarket have been running at a loss, with a 40 per cent drop in revenue in the past five years, Caughey told the NZ Herald in an exclusive interview.

He cited a range of factors that were largely outside the company’s control, including the economic downturn and a big drop in consumer confidence; the rise of shopping malls; upmarket brands building their own retail stores; Auckland CBD traffic, crime and safety issues, and a drop in pedestrians with many people still working from home.

“The company is trading at a significant loss, which is unsustainable. Sadly, we do not believe sales can be restored to levels necessary to continue to operate,” Caughey said.