Christchurch-based national retail chain Smiths City Group is six months behind repairs to its flagship Colombo St store because of consenting delays.
Group managing director Rick Hellings told shareholders at the company's annual meeting in Christchurch yesterday that repairs the retailer had hoped to complete by Christmas, to restore the site to up to 90 per cent of its pre-quake floorspace, would now only be finished half way through next year.
The store is about two-thirds its pre-quake size at present.
"I think one or two of you might have read what is happening about consent processes in Christchurch. When they tell you how bad it is, don't believe them. It's a lot worse," Hellings said. "We have been operating that store since November 2011. Our staff still use portacom toilets. We don't have inside toilets."
Head office would likely remain in Sockburn for another 18 months. Retail floor space was the main priority.
Hellings said the market remained highly competitive with prices of electronic goods continuing to fall.
The market was driven by high discounts and ever-longer interest-free promotions.
During the year the group had arranged cheaper funding for its customer credit subsidiary, Smithcorp Finance Limited, to reduce funding costs and its Powerstore and Furniture Concepts stores on Moorhouse Ave had opened with "a hiss and a roar". However, Christchurch was still awaiting the post-quake boom.
Wellington had been "a thorn in the side", affected by the global financial crisis and reduced Government spending.
As part of a "radical overhaul" the group closed its Upper Hutt store in March, replaced it with one on the Kapiti Coast and was relocating its Porirua store for better exposure.
Hellings said the business did not expect to see trading conditions change significantly and would focus on kitchen appliances, beds, furniture and televisions as opposed to consumer electronics.
The new financial year had got off to a sluggish start with sales in the first quarter down on the previous year.
Chairman Craig Boyce said that was understandable in places like Greymouth, Dunedin and Invercargill, which had had actual or threatened job losses.
Sales had improved this month but credit-based promotions were not as popular as they had been in the past.
Price deflation in electronic goods continued but in furniture, flooring and whiteware pricepoints were steady and margins were "OK".
The Christchurch rebuild would provide a boost but was "frustratingly slow" to gather momentum, Boyce said, although the group was seeing increases in sales of floor coverings and whiteware, which accompanied the refurbishing phase of the recovery.
"The picture upfront is clearly for significant homebuilding and that means more retail sales. The question is when?"
"Some companies have geared up for this rebuild too early and suffered as a result. We wait patiently for it."
There was better confidence heading into the new rural season than there was earlier this year, but Wellington was likely to remain flat, Boyce said.
The group reported a 23 per cent jump in net profit to $5.4 million for the year to April 2013, supported by good trading in the South Island thanks to a strong rural sector. Smiths City stock ended flat at 65 cents yesterday.
- © Fairfax NZ News
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