Sharechat Logo

Takeover creates South Island-wide chain

By Dana Johannsen

Friday 4th July 2003

Text too small?
Century-old Invercargill-based department store chain H & J Smith has continued its South Island expansion by buying retailer Arthur Barnett's Dunedin and Christchurch operations.

H&J Smith will later this year acquire the department store assets of Arthur Barnett and then form a new company to create a South Island-wide department store group.

Group managing director Acton Smith would not reveal the multi million-dollar price of the transaction. But the new company expects to generate an initial annual turnover of $70 million.

Once established, it will be New Zealand's largest independent department store group and employ more than 600 people, Mr Smith said.

With both companies more than 100 years old, the merging of the two department store businesses will bring together two of the South Island's best known retail brands.

The Arthur Barnett brand will be kept for the "foreseeable future" and its directors and shareholders Julian Smith and Trevor Scott will be on the board of the new company.

Mr Smith said the acquisition was logical and would give H&J Smith a presence in the South Island's two biggest cities.

H&J Smith is well-established in Invercargill, Gore, Nelson, Te Anau and Queenstown and has recently expanded into Balclutha and Blenheim.

John Green, chief operating officer of H&J Smith, has been appointed chief executive designate of the new department store group and will concentrate solely on the further development of the new group.

While there were similarities between H&J Smith and Arthur Barnett, Mr Green said the businesses were in "two different situations" and it was expected to take at least two years to fully integrate them.

Mr Green said he was confident department stores had a real place in the future retail landscape.

Arthur Barnett, formerly a listed company, went private last year after a $9.5 million takeover by Messrs Scott and Smith.

The company has ruled out plans to relist on the Stock Exchange.

Although the move would create a company with a critical mass of a size that will be capable of both natural growth and further development, Mr Green said there are no specific plans for expansion.

However, major refurbishment is under way in the Invercargill store and a new outlet is being planned for Queenstown.

The formal date for the merger will be November 1 but the two managements will work together from July 1 to ensure a smooth transition.

Richard Ballantyne, managing director of upmarket Christchurch department store Ballantynes, said the merger was a positive move for H&J Smith.

"We feel it's very good that they are a longstanding business with the longevity and reputation needed to do well," he said.

Although in some respects the two stores have similar lines of merchandise, Mr Ballantyne said he was not concerned about the increase in competition.



Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.
Bookmark and Share   Printable version
Related News

MARKET CLOSE: NZ shares gain as investors 'buy the rumour'; MRP becomes Mercury
NZ dollar falls vs yen as Bank of Japan delivers less stimulus than expected
Fletcher trims $12 mln from slimmed down Higgins acquisition
Moa stresses it has no undisclosed plans
Kingfish's Fisher says over-valued NZ shares have 'no room for earnings disappointment'
Investors press NZOG to resume dividends after return to profit
NZ business confidence dips in June as agriculture feels the pinch, construction stays positive
Statistics NZ delays June household labour force survey for two weeks
Todd gains clearance to sell 20% stake in former gold mine land to Coeur Mining
Bethunes signals capital raise will come if and when investment opportunity arises

IRG See IRG research reports