By Dana Johannsen
Friday 4th July 2003
|Text too small?|
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.
No comments yet
Skyline boosts profits on strong tourist growth
E Tu union, manufacturers to meet next month in Metals collective deal
Auditor-General to examine OIO after finance committee request
Shippers prefer Firth of Thames over Manukau to replace Auckland Port
Bathurst gains approval to buy land for coal mining at Nightcaps
Government won't lower GST threshold for online purchases before 2018
NZ business confidence perks up in June as construction, tourism underpin economy
Fletcher drops Horokiwi Quarries from Higgins purchase as application delayed again
O:Tu winemaker Marlborough Wine Estates trades on NXT; eyes Asia, US expansion
NZ government extends drought classification for eastern South Island