Tony Caughey: Smith & Caughey's Chair on the continued operation of their Queen Street store

Historic Auckland department store Smith and Caughey's is living to fight another day.  

The 144 year old business announced in May it would close next year, but today revealed measures to let it stay open. 

It will downsize physical trading to the ground floor of its Queen Street store, cut about 100 staff and close the Newmarket branch, and ramp up online operations. 

Chair Tony Caughey told Mike Hosking that it won’t be the scale it was before and it won’t be the same sort of retail operation, but they think they can make a go of it. 

He said they’re shrinking their brick and mortar because they think it’s appropriate for the market, so they’ll see how the balance with online retail plays out. 

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Episode Transcript

Speaker 1 (00:00):
The good news from the retail sector is that the
famed Smith and Coey's have announced their closure will well,
actually won't be happening. It'll be staying open. It is
a downsized operation, but one hundred jobs are being said,
which is good. Smith and coey chair Tony Coey's with
us on all this, Tony, very good morning to you.
Good morning make it must make you feel good to
make that sort of announcement.

Speaker 2 (00:18):
Yes, we're very pleased to be able to do it.

Speaker 1 (00:21):
Didn't you look at this option, I assume you did
before making the original announcement.

Speaker 2 (00:26):
Yes, we did. We looked pretty hard at it back
in February. I think there wasn't a single reason that changed.
It was a group of reasons, but we looked harder.
You know, we'd already seen what was happening overseas with
trends towards smaller format stores, how that was going. The
outpouring from staff during the staff consultation period was a

(00:47):
factor in there. We've got some very loyal staff. It've
been just wonderful throughout the process, and we've got a
whole lot of things in the pot. And that made
the call to run the smaller operation.

Speaker 1 (00:58):
Good part of what you do, of course is scale.
Have you killed the scale or you're taking a risk
on scale here now or not?

Speaker 2 (01:04):
Well, I think we are, but we've in some ways
picked the eyes out of what we've got and taken
the most profitable categories and shrinking them down. We won't
be the scale that we were before. It won't be
the same sort of retail operation, but we think we
can make a go of it.

Speaker 1 (01:20):
Queen Street, how much of that and its geography and
all the baggage that goes with that is about this
as opposed to you as a business.

Speaker 2 (01:30):
Well, at the time we said that there was a
perfect storm of about five factors going on and Queen
Street was one of them. I mean, clearly, my view
is that New Zealand has one chance for an international
city that's Auckland. We have to do it right and
we have to make the center of a friendly place
and it's currently not and that I think is in

(01:50):
a nutshell what we have to do. We've seen some
improvements with security recently with increased police, the council putting
increased security city with increased security, it's making a little
bit of a difference, but it's just the scratching the surface.
We've got to have a fundamental relook to clean up
the center of town if we want to be serious
about having an international city.

Speaker 1 (02:10):
Couldn't agree more. What's your sense of the economy with
all the noise around retail generally the recession? Do you'd
forget Queen Street but just retail generally?

Speaker 2 (02:19):
Retail generally is tough and if you look at the
figures nationally in recent weeks, there's not a lot of
confidence out there. There's not a lot of spare money,
and many retailers are doing it really really tough.

Speaker 1 (02:35):
What about your online presence and its future given what
you've announced, and will that play a greater presence.

Speaker 2 (02:43):
Well, online will be part of mixed going forward. It
has been a very important part for us, particularly during
COVID when our stores were shut. So it will very
much feature as part of that future.

Speaker 1 (02:54):
And do you bullish on bricks and more to generally.

Speaker 2 (02:57):
Well bricks and more to have a place it's on
the channel. It's a range of things. You know, we're
shrinking our bricks and mortar because we think that's appropriate
for the market, and so we'll just see how that
balance blows out.

Speaker 1 (03:12):
Well, I wish you all the very best with it, Tony,
Kelley Smith and Kelly So the news is good for now.
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