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“We have started further consultation with staff on this second option and possible solutions,” Cowie said.
“We aim to confirm the outcome of the consultation by the end of next week, after which we will provide a further update.”
The original proposal, presented to the company’s nearly 250 employees in late May, would have Smith & Caughey’s permanently closed in early 2025.
The company’s owners said at the time the proposed closure of the business – including its prestigious and historic ‘Grande Dame’ Queen Street store – was the result of a number of factors and was a sad and heartbreaking moment for Auckland and New Zealand retail.
Known for its premium brands, customer service and world-renowned Christmas window displays, Smith & Caughey’s has been a physical and cultural landmark in the city since 1880, when Marianne Smith (née Caughey) opened a drapery and millinery shop in the city.
Mr Caughey said today that following consultation and feedback from staff, as well as “other similar ideas being considered by the board”, the company has now identified new options.
This will involve a “significantly downsized” company, including adjusting staff numbers to accommodate a smaller operation.
In an exclusive interview in May, Cowie said the company’s stores on Queen Street and Newmarket had been loss-making, with revenue down 40 per cent over the past five years.
He cited a range of factors largely outside the company’s control, including the recession and a sharp drop in consumer confidence; the rise of shopping centres; high-end brands setting up their own retail stores; traffic, crime and safety issues in Auckland’s CBD, and fewer pedestrians as many people continued to work from home.
“The company is currently operating at a significant loss, which is unsustainable,” Caughey said in a statement. “Regrettably, we do not believe that sales will recover to the levels required to continue operating.”
In accepting The HeraldCowie said the owners considered about a dozen options to keep the store, including closing one of the two locations or moving to a smaller location.
He said there was no single factor that compelled the company to consider the proposal.
“The retail landscape has undergone significant changes in recent years. This includes increased competition from new shopping malls and the rise of luxury and high-end brand retail stores, which have reshaped consumer preferences and affected the appeal of high-end department stores.”
The fallout from the coronavirus pandemic has also meant that fewer people are travelling into the city to work.
This was followed by a “sharp fall in consumer confidence and the growing impact of the cost of living crisis”.
“Ongoing roadworks and development activity in the area is causing disruption to traditional shoppers who don’t frequent the city centre.”
- Contributing Editor Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial positions at NZME, including editor-in-chief, editor of the NZ Herald and editor of the Herald on Sunday.
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