The H&J Smith Group (HJSG) announces their proposal to call time on its long-running Department Store business.
“We have been honoured to have spent more than a century as an integral part of the Invercargill and Southland community,” said H & J Smith Group Managing Director Jason Smith.
“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. The marketplace is evolving again and moving away from the traditional Department Store model. So, with an eye to the future, we believe it is time for H&J Smith to evolve again,” explains Smith.
Significant shifts have seen systemic changes in the retail sector in New Zealand and around the world. Shopping preferences, supply chain issues, supplier access and procurement, and ongoing reinvestment requirements have all significantly impacted. They will continue to make it more difficult for independent retailers to operate.
In 2020, supplier constraints, COVID-19, and restraint on reinvestment led to H&J Smith Group taking a decision to restructure the business to right-size its retail footprint in Otago and Southland. This included closing several stores, including Dunedin, Mosgiel, Balclutha, and Te Anau.
“The steps we took in 2020 and early 2021 put us in a good position to recover from the impacts of COVID shutdowns and continuing aftershocks of the pandemic. The recovery has been better than we expected, and we continue to trade positively,” said H&J Smith CEO John Green.
The systematic changes already underway in the retail sector have accelerated since the pandemic.
“The supply chain has faced the biggest changes where procuring stocks has only grown more difficult. Our ability to establish a point of difference that can support sustainable growth is undermined by these changes,” said Green.
“It is important for H&J Smith to be proactive, so we can take care of our people and help them through this transition rather than have the decision made for us in the future,” continues Green.
In addition to the changing retail market, the flagship HJS Department Store in Invercargill requires significant remediations to the existing building to ensure it meets 100 percent NBS. The Invercargill store is made up of 12 different buildings, built at different times, all of which have different seismic ratings, which prevent subdividing of the space for other tenants or uses. While the company has 23 years to complete the remediation of the space, the extensive remediation required does not remedy the many issues affecting all independent retailers.
“The decision to propose calling time on our Department Stores has not been taken lightly. However, we have always reflected the needs and desires of our community while looking to the future. Now we feel it is time for the community to create a new vision for what this building and site can be moving forward, potentially as part of the current rejuvenation of Invercargill’s city centre,” said Smith.
The Mitre10 MEGA Invercargill & Mitre10 MEGA Queenstown and Laser Electrical are unaffected and will operate as usual.
