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Kirkcaldie & Stains pulls crowd amid tough times

JASON KRUPP
Last updated 05:00 22/01/2013
NOT WANTING TO MISS OUT:  A queue of people hoping to get bargains forms outside Kirkcaldie & Stains for its summer sale yesterday.
PHIL REID/Fairfax NZ

NOT WANTING TO MISS OUT: A queue of people hoping to get bargains forms outside Kirkcaldie & Stains for its summer sale yesterday.

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Cheap big ticket items and deep discounts store-wide have drawn customers by the hundreds to Kirkcaldie & Stains' summer sale, but the retailer says business is still tough.

The Wellington department store yesterday opened the doors of its summer sale to droves of Wellingtonians, some of whom had camped out on the pavement overnight in hopes of walking away with a Door Buster bargain.

This is only the second time the store has used the promotion, which offers as much as a 90 per cent discount on 60 high-end items, handed to customers on a first-come, first-served basis.

Zoe Robinson, a film student, joined her boyfriend and his brother at noon on Sunday in the hopes of buying six bottles of Moet & Chandon for $99, having been marked down from about $700.

"It's definitely a case of striking when the going is good," she said of the almost 24-hour experience.

The champagne is destined for her mother, who couldn't attend the sale, she said.

But even with the crowds flocking in the door, reportedly numbering in the hundreds, the department store is remaining cautious about its prospects in the year ahead.

The firm, which operates a retail and property businesses, has struggled to keep its store profitable as cost-conscious consumers rein in their spending.

In the year to August 31, Kirks reported a net loss of $773,000, largely due to its ailing retail operations, which chalked up a loss of $1.2 million compared with a loss of $465,000 in the previous year.

"Retail is a tough game to be in and I don't think it's going to get any easier," said managing director John Milford, noting that sales over the key Christmas period had been "OK but not outstanding".

He said part of problem was overuse of the term "sale" by retailers to lure customers into their shops.

That had had the effect of priming customers to buy goods only when big discounts are attached.

He said Kirkcaldie hosted just two sales a year to clear out stock ahead of the summer and winter seasons, when much of its range was marked down by as much as half its normal price.

To tackle the tepid retail growth, Milford said the firm was looking to drive profitability through online sales.

"This allows it to reach a wider customer base, and the use of the store as an existing warehouse keeps costs down.

"It adds incremental sales, and our customers are demanding it, so we've got to keep up.

"Our brand is also 150 years old and reinforces our online offering," Milford said.

"We don't have to build confidence with people who shop online."

The firm is also looking to spin off its Harbour City Tower property in downtown Wellington, but the only offer to be made fell through late last year.

The store rents its current premises.

Kirkcaldie shares closed unchanged at $2.99 yesterday, little different from where they were 12 months ago.

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- BusinessDay.co.nz

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