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Dunedin Mayor Aaron Hawkins is encouraging retailer H&J Smith to reconsider closing the doors of its department stores.

H&J Smith Group announced yesterday it was proposing to shut its stores in Dunedin, Mosgiel, Balclutha and Te Anau and its Gore store could be reduced in size. About 175 staff would be affected.

The Invercargill and Queenstown shops would stay open.

The Armoury Store in Dunedin and Outdoor World in Queenstown, owned by H&J Smith Group, would also close.

The Take Note store in Gore would relocate.

Mr Hawkins said he hoped H&J would access Government support and avoid shutting shops.

‘‘Proposal or not, this will be a stressful time for staff and their families. Our thoughts are with them,’’ he said.

The company said the lingering impact of Covid-19 had led to the proposed changes.

The proposal was now under consideration and a final decision would be made in early June.

The closures and downsizing could occur from August this year through to February 2021.

Clutha Mayor Bryan Cadogan said the series of proposed closures were a blow to the lower South Island.

‘‘It’s a blunt reminder that we need to be shopping locally.’’

The Clutha community would rally to provide support for staff in the coming days, he said.

H&J Smith was established in 1900 as a drapery store in Invercargill. It grew to be one of New Zealand’s largest privately owned retail companies.

The Dunedin store is an anchor tenant in the Meridian Mall. It delayed its reopening by a week when shopping restrictions were relaxed under Alert Level 2 because of seismic strengthening work needed at the mall. That reopening might now be short-lived.

Kmart also delayed its reopening at the mall.

H&J Group said cutting the size of its retail division was proposed to secure its long-term future.

Managing director Jason Smith said the company had been significantly affected by the Covid-19 pandemic.

“Our retail division has been grappling with increasing wage and compliance costs, issues around store size and scale, difficulties securing supply, new entrants to the New Zealand market and the increasing dominance of multinational chains,’’ he said.

“We also have an ageing store network in need of capital expenditure ...’’

Pursuing upgrades would not be prudent given ongoing uncertainty post-Covid, he said.

“H&J Smith has been in operation for 120 years. To be here for 120 more, it’s now very clear we need a long-term view.’’

Mr Smith said consolidating operations back to the Invercargill home base should secure a viable future for the company.

“I want to acknowledge all our staff, customers and suppliers who are impacted by this proposal,’’ Mr Smith said.

Other businesses operated by the H&J Smith Group — Mitre 10 Mega in Invercargill and Queenstown, and Laser Electrical in Invercargill — were not included in the proposal.

H&J Smith

Shops proposed to close:

Dunedin, Mosgiel, Balclutha, Te Anau

Shops set to downsize:

Gore H&J

Shop set to move:

Take Note, Gore

Other shops proposed to close:

Armoury Store, Dunedin; Outdoor World, Queenstown

Staying open:

H&J Smith, Invercargill and Queenstown

Number of staff affected:

175

Timeframe for possible closure and downsizing:

August 2020 to February 2021