A very expensive contrarian bet
When Smith & Caughey’s closed after 145 years and T Galleria walked away from its New Zealand operations, most observers drew the obvious conclusion: Queen Street department store retail is finished. Edward von Dadelszen, CEO of Faradays, is betting $30 million that they are wrong.
The investment group, which includes property investor Mark Francis and former All Black Dan Carter, plans to open a 3,000sqm three-storey department store at 131 Queen Street by mid-2026. The building is the former Milne & Choyce site, a 1924 Art Deco structure that developer Andrew Krukziener has called “the largest and bravest retail tenancy transaction on the street in the past 100 years.”
Brave is one word. Reckless is another. The evidence will determine which applies.
The numbers say retreat
The data confronting Faradays is brutal. Auckland CBD retail vacancy rose to 13.1% in Q4 2025, nearly doubling from 7.5% in Q2 2025. Heart of the City’s September 2025 quarter showed overall CBD spend down 6% year-on-year, transactions down 6%, and annual foot traffic down 8%.
Smith & Caughey’s didn’t just fade. It suffered a 40% drop in revenue over five years before shutting. T Galleria cited “challenging economic conditions” across its entire Australasian operation. These are not obscure failures. They are the two most recent attempts at exactly what Faradays proposes to do, in exactly the same location.
The thesis behind the timing
Von Dadelszen is not ignoring the headwinds. In March 2026, he acknowledged that “luxury is experiencing one of its most significant recalibrations in recent memory”, with global growth settling into a “more sustainable 2-4% annual growth trajectory” after the post-pandemic sugar hit.
His core argument is a leakage story. New Zealanders spend roughly $9 billion annually on luxury goods overseas, and the domestic market has been “essentially ignored.” Auckland’s luxury representation sits at 11.6% of CBD tenancies, well below comparable international cities. The opportunity, in this framing, is not growing the pie but capturing spend that currently leaves the country.
The format matters too. This is not a replica of the original Parnell boutique. Von Dadelszen has described it as “catering to a broader market”, with three levels spanning accessible contemporary brands through to luxury, plus a basement cultural hub. Gen Z and Millennials now represent 40% of the global luxury market, and the multi-tier model is designed to meet them at every price point.
The green shoots are real but fragile
Buried in the same Heart of the City data that shows annual decline are some directional improvements. International visitor spending on food retail was up 13%, and September foot traffic alone rose 6% year-on-year even as the 12-month figure remained negative. Prime-grade office vacancy fell to 8.4% from 9.8%, and Quattro Group paid $104 million for four interconnected CBD office buildings, suggesting other private capital shares the confidence thesis.
The City Rail Link is the structural wildcard. Architect Jeff Fearon noted that 131 Queen Street sits in the context of “the pending sea-change expected from the imminent opening of new central city stations”. If CRL delivers the foot traffic transformation its proponents promise, Faradays’ timing looks prescient. If it doesn’t, the store is relying on the same access patterns that failed its predecessors.
What business owners should watch
For the wider CBD business community, Faradays matters beyond handbags. The store plans approximately 75-80 jobs and represents the kind of anchor tenancy that generates spillover foot traffic for surrounding retailers and hospitality operators. Heart of the City chief executive Viv Beck has said “the city needs an international offering to maintain its status globally”, and Faradays is the most substantial attempt to provide one since Smith & Caughey’s fell over.
The brand lineup remains unconfirmed. The mid-2026 opening target creates a clear accountability date. The two most comparable recent operations both failed. But $30 million of private capital walking toward a problem, rather than away from it, is a signal the market should take seriously. Whether it is a signal of recovery or of overconfidence, the next twelve months will make obvious.
Sources
- Faradays plans three-storey $30m luxury department store on Auckland’s Queen St (2025-11-06)
- Von Dadelszen, Francis, Dan Carter kick $30m into CBD retail (2025-11-07)
- Department stores aren’t dead yet (2025-11-17)
- All that glitters: New Zealand’s luxury market ready to shine in 2026 (2026-03-30)
- September 2025 Quarterly Results – Heart of the City (2025-12-02)
- Auckland Retail Market Dynamics Q4 2025 (2026-02-12)