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Smith & Caughey’s closing: Retail NZ devastated by news, no business immune to economic challenges

Raphael Franks,
Publish Date
Wed, 29 May 2024, 2:22pm

Smith & Caughey’s closing: Retail NZ devastated by news, no business immune to economic challenges

Raphael Franks,
Publish Date
Wed, 29 May 2024, 2:22pm
  • Auckland’s flagship department store, Smith & Caughey’s, is set to close in early 2025
  • Nearly 250 staff were briefed today on the closure proposal after 144 years in business
  • The upmarket department store has battled a 40 per cent drop in revenue in past 5 years

The closure of Smith & Caughey’s in central Auckland is devastating and proof that no business is immune to current economic challenges, Retail NZ says.

After the 144-year-old business’ chairman revealed to the Herald it had released a proposal to staff to close early next year, Carolyn Young - Retail NZ chief executive - said the loss of the store would leave a hole in the city and a gap in the retail market.

It was the end of an icon, she said.

“It does feel really bleak. Think about how beautiful the store is. This is a really iconic, really beautiful store to go into,” Young said.

“It does show that even after 144 years, they’re not immune to challenges. It says that no business is immune to suffering the struggles of the environment that we’re in right now.”

Smith & Caughey’s – famous for its upmarket brands, customer service and globally acclaimed Christmas window displays – has been a landmark, physically and culturally, in the city since Marianne Smith (nee Caughey) established a drapers and millinery shop in the city in 1880.

Smith & Caughey’s stores in Queen St and Newmarket have been running at a loss, with a 40 per cent drop in revenue in the past five years, chairman Tony Caughey told the NZ Herald in an exclusive interview.

Caughey cited a range of factors that were largely outside of the company’s control, including the economic downturn and a big drop in consumer confidence; the rise of shopping malls; upmarket brands building their own retail stores; Auckland CBD traffic, crime and safety issues and a drop in pedestrians with many people still working from home.

“The company is trading at a significant loss which is unsustainable. Sadly, we do not believe sales can be restored to levels necessary to continue to operate,” Caughey said in a statement.

Young said: “This is devastating both for the store, the staff and for the Auckland community. It would be a really sad time [if it does close]”.

Smith & Caughey’s stocked brands unavailable elsewhere, which on top of the store’s prestige, was a particular drawcard for shoppers, she said.

“So when you have the cruise ships coming through, it’s always a destination to go to. You can have lunch upstairs or a coffee, you can browse through the store and you know you’ve got three floors to look through.

“They just have that little something about them that’s different to anything else on Queen St now,” Young said.

“It will be a big loss to the CBD.”

She questioned what would take its place at 253/261 Queen St, noting the store’s floor space and the economic challenges that would likely still be present.

Raphael Franks is an Auckland-based reporter who covers breaking news. He joined the Herald as a Te Rito cadet in 2022.

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