Image source: Smith & Caughey’s Facebook page
Smith & Caughey’s, one of New Zealand’s oldest department stores, has announced its plans to shut down for good in early 2025.
Auckland’s 144-year-old department store has begun consulting with its nearly 240 staff about the possible closure of its operations on Queen Street, Central Auckland, and in Newmarket.
Tony Caughey, chairperson of Smith & Caughey’s, described the proposal as “deeply emotional” for the staff.
“Presenting this proposal has been a deeply emotional time for the people connected to this historic establishment. We are acutely mindful of the impact to staff, customers, and suppliers by the proposal,” Caughey stated in a media release.
“Since its founding by Marianne Smith, nee Caughey, in 1880, Smith & Caughey has focused on serving the people of Auckland, whilst preserving the traditions cherished by generations of discerning shoppers.”
Caughey said that the company’s physical locations had experienced a 40% revenue decline over the past five years due to “factors largely outside our control.”
There was a “perfect storm” of factors, Caughey said. The changes in the retail landscape, including the rise of new shopping malls, have led consumers to shift their attention away from prestige department stores. Caughey also noted that the aftermath of the COVID pandemic has resulted in fewer office workers in the central city, while ongoing roadworks and area developments have disrupted shoppers.
“As a result, the company is trading at a significant loss, which is unsustainable. We do not believe sales can be restored to levels necessary to continue to operate.”
He also mentioned that professional advisers hired by the board found “no appetite for risks associated with further investment in retail” in the “current climate.”
However, Caughey emphasised that it was just a proposal at this point and no decision has been made yet. The proposal would be under consultation with staff for about five weeks. It is taking into account feedback from staff as well as exploring any other possible options to continue operations.
In a twist of fate, on the same day the proposal was announced, the store became the victim of a cyber attack targeting its operational systems. “The attack has severely impacted our ability to communicate with our staff, customers, suppliers, and other critical stakeholders,” Caughey stated. Despite this setback, the store shared on a Facebook post that it had successfully managed to overcome the cyber attack and is open for business as usual today at both its Queen Street and Newmarket stores.
