Christchurch-based Smiths City, which is marking its centennial year, has suspended dividends.
Its shares were trading at 39c yesterday, more than 44% down on a year ago.
Revenue for the listed retailer, which was founded in 1918, declined 5.1% to $215.9million in the year to April, and its net loss before tax was down from a $2million net profit a year ago to a $9.9million loss; a much larger loss than guidance given earlier in the year.
Part of that loss was attributed to a $1.5million reimbursement due to underpaid staff.
Smiths' chairman Alastair Kerr said the company started a transformation programme three years ago, but the board and management now believed it was not ``sufficiently focused'' on delivering on the company's goal to help its customers.
``Additionally, the pace of change has not been fast enough to meet changing market conditions.
He said the financial results for the year ``reinforced this view''.
The revenue downturn reflected easing in demand and intense competition in the first half of the year, further impacted by store refurbishments and closures, election-year trading uncertainty and in some areas, an insufficient customer focus, Mr Kerr said.
He said recognition of a $4.9million provision for onerous leases, of several underperforming stores, reflected the company's determination to make ``difficult decisions'', including the closure of three outlets.
Priorities for the year ahead included a significant lift in brand investment, technology, systems and training to drive business efficiency and improve customer experience, he said.
Smiths City ended its year to April with $6.2million cash and net interest-bearing debt of $54.7million, but net debt against total assets rose from 31% a year ago to to 40.4%.
Chief executive Roy Campbell said the past year's challenging trading conditions exposed weaknesses in the restructuring programme which now needed an injection of new energy.
On the outlook for the year ahead, Mr Campbell said it ``remains challenging''. The first two months' trading were ``volatile'' because of ``muted'' housing market, but benefits were expected from positive rural sentiment.
Mr Campbell said that ``in retrospect'' he agreed with the Employment Court finding staff should have been paid for the 15-minute pre-work meetings they were required to attend and Smiths City had been ``falling short'' of its own values.
The award covered all current and previous staff of the past six years. Smiths City had quantified the cost so far at about $1.5million.
