Invercargill's business owners and leaders have reacted with shock and sadness following H&J Smith's announcement this morning (18 May) proposing closure of all of their iconic department stores.

Esk Street retailer Mcknight & Brown owner Bernie Brown said he was shocked and saddened for potentially what would happen.

"It's [H&J Smith] an iconic store that people nationwide know."

Brown said people commonly used phrases like "We'll go round to H&Js [or] I'll meet you at H&Js."

"It is very, very sad and a significant loss for the city and the Invercargill retail landscape," he said.

Invercargill Licensing Trust Chief Executive Officer Chris Ramsey said it was incredibly sad to see what had been an institution or cornerstone of Invercargill, both in a retail and business sense, having to potentially go down this path.

He said it was challenging for every industry at the moment with fuel costs and inflation making it an incredibly difficult time for both consumers and businesses.

Invercargill City Council Mayor Nobby Clark said it saddened him to see what the H&J Smith owners were facing after 123 years.

He declined any further comment until the owners had worked through their obligations to consult with staff.

Invercargill MP Penny Simmonds said she was shocked and saddened at the proposed closure of the city’s iconic Southland department store H & J Smith, which reflects broader economic concerns in the province.

“This news aligns with the warnings Southlanders have heard for months, that rampant inflation and soaring interest rates will come at a cost to employment, as we close our wallets to spending on other than the necessities of food and shelter."

“It is heart-breaking to see a business that has meant so much to Southland, over 123 years, now considering closure in November - putting more than 220 jobs at risk."

“My thoughts are with all of the staff, many of whom I have known for several years, as well as the Smith family. I know they will all be hurting at this time," Simmonds said.

Southland Business Chamber (SBC) Chief Executive Officer Sheree Carey said the announcement was really gutting.

"Its absolutely devastating news, not only just for the staff and their families, [but this] obviously is going to have a huge flow on effect as they're such a big employer in town."

"It's not just that it is a family owned business... it's [also] a massive physical building in our CBD."

"For the revitalisation of the CBD it kind of feels like we're going two steps forward and one step back with this news," Carey said.

Carey said a lot of people had got into the habit of shopping online over the COVID period.

"We're [SBC] really encouraging people to continue to get out and shop local, otherwise this is what happens to our retail sector."

However Carey said she was excited by the prospect that some of the more profitable parts of the business might be put into separate ownership.

And SBC also had members who were crying out for staff, she said.