H&J Smith is closing its store operations — leaving behind a century of retail legacy in Southland and 220 staff out of work.
Group managing director Jason Smith announced yesterday its proposal to "call time" on its long-running department store business in Invercargill, Gore and Queenstown.
Southland Business Chamber chief executive Sheree Carey said the shock announcement was "devastating news".
Mr Smith said the decision was not taken lightly, but it was due to changes on the department store model — "which was in decline" — and issues around earthquake strengthening its building in Invercargill.
"We have been honoured to have spent more than a century as an integral part of the Invercargill, and Southland, community.
"Despite successful trading for over a century, the H&J Smith Group is making the decision to call time on its department stores because it is not a sustainable model for the future."
Located in the heart of the Invercargill’s CBD, the 12,000sq m H&J Smith flagship store also required significant remediations to the existing building to ensure it met 100% of the national building standard, he said.
The complex was made up of 12 different buildings, all of which had different seismic ratings, which Mr Smith believed prevented 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."
Supplier constraints, Covid-19 and restraint on reinvestment had taken a toll on the businesses in recent years, which led the group to close Dunedin, Mosgiel, Balclutha and Te Anau stores in 2020, he said.
While it was a difficult decision to take this further step, he believed it was the right time, as the site could "move forward" as part of the rejuvenation of Invercargill’s city centre.
H&J Smith chief executive John Green said the business employed 220 people, 190 of them in Invercargill.
"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."
All the employees had contractual provisions in their employment agreements that provided for a paid work notice period of four weeks and redundancy compensation, he said.
"We will also be investigating, should the proposal go forward, if some of the affected staff members can potentially be redeployed throughout the wider H&J Smith Group."
Southland Business Chamber chief executive Sheree Carey was surprised with the news and said it was a sad day for Southland.
"It is devastating news to hear ... It is a real blow to the city centre, to the retail community but also to all the staff involved as they are a big employer in Southland.
"It is going to have an impact and a flow-on effect for the families as well.
"We need to be able to rally, as a business community, to support them and find other work for the workers should the proposal end in permanent closure."
The proposal would be in consultation for four weeks with a final decision expected by June 23.
