One of New Zealand's oldest department stores Smith and Caughey's is set to close under a proposal that was presented to more than 200 staff today.
The store has been a famous part of Auckland's retail scene, having been founded in 1880. But the historic department store will soon close for good in early 2025, under a proposal presented to staff earlier today.
The retailer's Newmarket branch and website are also set to go amid a "perfect storm" of causes.
Smith and Caughey's chairperson Tony Caughey said it was a "deeply emotional" announcement for staff.
"Presenting this proposal has been a deeply emotional time for the people connected to this historic establishment. We are acutely mindful of the impact to staff, customers and suppliers by the proposal," he said in a media release.
It's been retail royalty, an icon and stalwart of Central Auckland, selling high-end fashion and homewares since 1880. (Source: 1News)
“Since its founding by Marianne Smith, nee Caughey, in 1880, Smith and Caughey has focused on serving the people of Auckland, whilst preserving the traditions cherished by generations of discerning shoppers."
He said the company's physical locations had suffered a 40% decline in revenue over the past five years, due to "factors largely outside our control".
“As a result, the company is trading at a significant loss which is unsustainable. We do not believe sales can be restored to levels necessary to continue to operate."
Caughey stated: “Sadly, we don’t believe this is a storm to be weathered."
The proposal for closure was announced to nearly 240 staff members this morning. Stores will be closed for the rest of today but will open tomorrow as usual at 10am.
Caughey said there was no single factor for the closure, but blamed increasing competition, the Covid-19 pandemic, ongoing cost of living pressure, and ongoing roadworks in the area.
"There is no single reason that has forced us to consider this proposal, but a range of factors have created a perfect storm.
"In recent years the retail landscape has undergone a significant transformation.
"This includes the growth of increased competition from new shopping malls, and the rise of retail stores for luxury and prestige brands that has reshaped consumer preference and impacted the appeal of prestige department stores.
"In addition, the aftermath of the Covid pandemic has led to a reduction in the number of office workers in the central city on any given day, followed by the huge drop in consumer confidence and the mounting impact of the cost-of-living crises.
"The impacts of the ongoing roadworks and development activity in the area have been disruptive to the traditional shopper who is coming into the city centre less frequently."
He said professional advisers hired by the board found there was "no appetite for risks associated with further investment in retail" in the "current climate".
"We have been unable to find a solution to deal with the significant headwinds we face and have today announced the commencement of a period of consultation with staff about potentially ceasing all our retail operations."
Regardless of the outcome of the proposal, the beloved Christmas display would go ahead this year.
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