$20m Queenstown Mitre 10 plan drives H&Js
Changes to H & J Smith Ltd's retail strategy in the past six months has been largely driven by a desire to set up a $20 million Mitre 10 Mega in Queenstown, managing director Acton Smith said.
Late last year the department store announced plans to close its furniture discounter Big Scotty's. It has since down-sized its home appliance centre, is merging its stationery businesses and has plans to bring Outdoor World within its Tay St complex.
Mr Acton said the changes were not motivated by the credit crunch but the company's evolving plans.
"We have been making changes within our organisation to prepare for the future again. Part of that is preparing for a (Mitre 10) Mega store in Queenstown.
"We don't have an unlimited supply (of capital)."
The cost of land and planning in Queenstown was high and plans had been defeated twice in the past seven years but he hoped the new Mitre 10 Mega would be under way within two years.
"A full-scale Mitre 10 Mega would be a $20 million investment – probably more in this case. We will still have to go and borrow money. These are significant-sized businesses."
Another motivating factor was the constantly changing retail landscape, he said.
Twenty years ago, when the company entered the discount furniture market there were few competitors. Now that market was well supplied. It was similar for the home appliance industry.
The company was constantly changing to meet market demand and had previously been involved in tourism, opened and closed stores as far away as Nelson and Marlborough and opened three factories.
"Everything is now made in China," Mr Smith said.
"I'd been in China and saw what was happening in the early 1980s and said `this won't be a sustainable place for us'. We changed and moved our resources somewhere else.
"That's business. Nothing should stand still," he said.
The shift for Outdoor World from a rented property on Tay St to within the H & J Smith complex would be an expansion for the popular branch. It would sit inside the area vacated by the appliance centre but stretching from Esk St to Tay St on one floor, he said.
WHAT IS HAPPENING?
- October 2010: H & J Smith announce furniture discounter Big Scotty's is to close its doors
- December 2010: the company says it is downsizing its home appliance centre
- About June 2011: Esk St-based Paper Plus franchise to merge into Take Note stationery store within the H & J Smith complex
- 2012: Outdoor World to close shop on Tay St and reopen within the existing H & J Smith complex
- 2013: the company hopes to build a Mitre 10 Mega in Queenstown
- © Fairfax NZ News