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Kirkcaldie mulls further property development

Wednesday 15th February 2012

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Kirkcaldie & Stains, Wellington’s upscale department store owner, is mulling further property development while awaiting an offer for its unprofitable retail business.

The NZX-listed company owns its flagship store on Lambton Quay and the Harbour City Centre, a historic six-floor retail and office building next door that is currently being earthquake strengthened. The firm told shareholders yesterday it is looking to expand its property arm amid ailing retail sales.

“At the back of and adjacent to the Harbour City Centre is our older building which presently is a car park and stock storage and mark up room,” said Falcon Clouston, chairman at the company’s annual general meeting. “This building is a potential development site and your directors are currently exploring the range of options for dealing with this site.”

The assessment of development options comes after the group received an indication of interest to purchase the retail business from an investor group that hasn’t been publicly identified. J C Capital, which is arranging the transaction, met with Clouston in December but as of yet no offer has yet been made to purchase the business.

Selwyn and David Cushing increased their stake in the department store company to 17.1% in June, though ruled out a full takeover of group. The Cushing family’s investment arm, H&G Ltd., made two purchases of Kirkcaldie shares, paying $2.56 apiece, valuing the retailer at $26.2 million.

The group reported a pretax loss of $56,000 for the year ended Aug. 31, down from a loss of $1.9 million a year earlier. Sales fell 3.8 percent to $39 million. The retailer has since experienced a 3.4 percent pick-up sales for the five months ended January, helped by Rugby World Cup spending, World of Wearable Arts and Wellington on a Plate.

The retailer is introducing a new customer management system that integrates point-of -sale inventory management and online sales. The system will be fully functional by August 2012.

Clouston expects the groups outlook to remain bleak with, “another difficult year for the company,” as management teams and the directors “focused on ensuring that the company is well placed to take advantage of the end of the current recessionary environment.”

The directors declared and paid dividends during the financial year, at 8 cents per share, the same as a year earlier.  

The shares last traded at $3 on the Feb. 10.


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