Iconic Southland department store brand H&J Smith Group is proposing to close or downsize all but its flagship stores in Invercargill and Queenstown as it battles the COVID-19 fallout.

The H&J Smith Retail Division is the general merchandise division of the H&J Smith Group. It comprises six H&J Smith department stores, two Outdoor stores, Paper Plus Invercargill and the Take Note store in Gore, which operate throughout Otago and Southland.

Under the proposal, the H&J Smith stores in Dunedin, Mosgiel, Balclutha and Te Anau would all close, while H&J Smith in Gore would reduce in size, and the Take Note store in Gore would relocate. The Armoury Store in Dunedin and Outdoor World at Remarkables Park,Queenstown, owned by the H&J Smith Group, would also close.

Approximately 175 staff are affected.

Managing Director, Jason Smith, said the company had been significantly impacted by the COVID-19 pandemic and now needed to consider options for managing its business through what was anticipated to be a long and slow economic recovery.

“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 NZ market and the increasing dominance of multinational chains. None of which is dissimilar to the well documented challenges facing department stores around the globe," he said.

“We also have an aging store network in need of capital expenditure to upgrade and modernise to meet future customer needs, which isn’t prudent given the ongoing uncertainty post-COVID.

“It’s against this backdrop, and a firm desire to continue to operate sustainably well into the future, that we are proposing to close or reduce in size all but our flagship H&J Smith department store in Invercargill, including Paper Plus and Outdoor Invercargill, and our H&J Smith department store at Remarkables Park in Queenstown."

He said H&J Smith had been in operation for 120 years but to be here for 120 more required a long-term view.

“In considering all our options, we believe that to secure a viable future is to reduce our store network and consolidate our operations back to our home base in Invercargill, as and when our lease commitments allow.

“Our lease commitments mean there will need to be a programme of change occurring over a period of time. During this period, there may need to be further adjustments to our strategy,”

Mr Smith said.

Closure or reduction timings at each store may occur from August 2020 through February 2021, however details would be confirmed as part of the proposal process. Staff would be kept fully

informed.

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

“It’s been a particularly difficult couple of months for our staff with the challenges of COVID-19 affecting how we deliver service to our customers. They’re at the forefront of our minds as we

work our way through this difficult process as quickly as possible to minimise further uncertainty for them.

“We’ve held face to face meetings in every store to present our staff with a summary of where we find ourselves and to outline the proposed changes we feel are required to reset our business for the future,” Mr Smith said.

The proposal was now under consideration, with a final decision to be made in early June.

The other businesses operated by the H & J Smith Group – Mitre 10 MEGA in Invercargill and Queenstown and Laser Electrical in Invercargill – are not included in this proposal.