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One of the country's oldest furniture and appliance
retailers, Smiths City, is to restructure, which may see stores close
and jobs go.
The company has told the stock exchange it is continuing discussions with potential strategic investors. Photo: Google Maps
The company is starting consultation with its employees and negotiations with its landlords.
It anticipates subdued trading conditions when its stores re-open under alert level 2.
The company said the Covid-19 pandemic and the temporary closure of its store network since late March continue to have a significant impact on its business.
Chairperson Alastair Kerr said it was likely the restructure would result in the closure of some stores and job losses, but the final outcome was dependent on how the process unfolds.
''We expect this consultation process to be concluded in just over two weeks with the board then to make a decision on adopting a final restructuring plan.''
The decision to start talks had been hard as the company had long benefited from a loyal customer base and committed staff, Kerr said.
''Through the lockdown this has also included a reduction in pay.
"We are grateful for the sacrifices the whole team has made and we regret having to take further action to ensure the future for the business.''
Kerr said a restructuring was clearly necessary in order to secure investment and have a sustainable post-pandemic retail business.
At the end of March, Smiths City reached an agreement with ASB Bank to delay a $1.5m repayment of a loan which was due.
It also said it was starting talks with potential investors to support the business.
In March, the company anticipated its net loss in its financial result for the year to 30 April would be greater than the $1.9m net loss recorded in the prior financial year. At that time the company said it had been focused on transforming its business over the past two years and the work had been progressing well.
Given the new uncertainties, management was now revisiting its transformation plan and looking for additional gains and further efficiencies.
The company told the stock exchange on Wednesday it was continuing discussions with potential strategic investors as foreshadowed in its announcement in March.
It said the company continued to retain the support of ASB Bank to see these discussions through to conclusion.
Smiths City was founded in Christchurch in 1918 and was floated on the stock exchange in 1972.
It has 34 stores throughout the country and employs more than 450 people.
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The company has told the stock exchange it is continuing discussions with potential strategic investors. Photo: Google Maps
It anticipates subdued trading conditions when its stores re-open under alert level 2.
The company said the Covid-19 pandemic and the temporary closure of its store network since late March continue to have a significant impact on its business.
Chairperson Alastair Kerr said it was likely the restructure would result in the closure of some stores and job losses, but the final outcome was dependent on how the process unfolds.
''We expect this consultation process to be concluded in just over two weeks with the board then to make a decision on adopting a final restructuring plan.''
The decision to start talks had been hard as the company had long benefited from a loyal customer base and committed staff, Kerr said.
''Through the lockdown this has also included a reduction in pay.
"We are grateful for the sacrifices the whole team has made and we regret having to take further action to ensure the future for the business.''
Kerr said a restructuring was clearly necessary in order to secure investment and have a sustainable post-pandemic retail business.
At the end of March, Smiths City reached an agreement with ASB Bank to delay a $1.5m repayment of a loan which was due.
It also said it was starting talks with potential investors to support the business.
In March, the company anticipated its net loss in its financial result for the year to 30 April would be greater than the $1.9m net loss recorded in the prior financial year. At that time the company said it had been focused on transforming its business over the past two years and the work had been progressing well.
Given the new uncertainties, management was now revisiting its transformation plan and looking for additional gains and further efficiencies.
The company told the stock exchange on Wednesday it was continuing discussions with potential strategic investors as foreshadowed in its announcement in March.
It said the company continued to retain the support of ASB Bank to see these discussions through to conclusion.
Smiths City was founded in Christchurch in 1918 and was floated on the stock exchange in 1972.
It has 34 stores throughout the country and employs more than 450 people.
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