Legendary Auckland retailer Smith & Caughey’s may yet be saved from closure.

The company announced today that two options are now on the table - closing for good in early 2025, as earlier proposed, or a new option of retaining a smaller presence in its landmark Queen St building and enhancing its online retail offering from February.

Under that second option, the company’s Newmarket store would still close, along with a large part of its Queen St operation.

But the 144-year-old retail store’s name would live on - the reduced Queen St operation would be focused “on a collection of popular categories”, Smith & Caughey’s chairman Tony Caughey said today.

“We have commenced a further consultation period with our staff on the second option and a potential path forward,” said Caughey.

“Our aim is to determine the outcome of the consultation by the end of next week [and] following this we will provide a further update.”

Smith and Caughey's chairman Tony Caughey in the flagship Queen St store in Auckland.

The initial proposal, presented to the company’s almost 250 staff in late May, was for Smith & Caughey’s to close for good in early 2025.

The proposed closure of the business - including its prestigious and historic “Grande Dame” Queen St store - had been caused by a “perfect storm” of factors, said its owners at the time, and marked a sad and heartbreaking moment for the Auckland and New Zealand retail landscape.

Smith & Caughey’s - famous for its upmarket brands, customer service and globally acclaimed Christmas window displays - has been a landmark, physically and culturally, in the city since Marianne Smith (nee Caughey) established a drapers and millinery shop in the city in 1880.

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Then and now - Smith & Caughey's, Queen St.

Caughey said today that following consultation and feedback from staff - along with “other similar ideas already under consideration by the board” - the company had now identified the new option.

It would involve a “significantly downsized” company, including adjusting staff numbers to align with the smaller operation.

Smith & Caughey’s in Auckland's CBD. Photo / Michael Craig

In an exclusive interview in May, Caughey said the company’s stores in Queen St and Newmarket had been running at a loss, with a 40% drop in revenue in the past five years.

He cited a range of factors that were largely outside the company’s control, including the economic downturn and a big drop in consumer confidence; the rise of shopping malls; upmarket brands building their own retail stores; Auckland CBD traffic, crime and safety issues, and a drop in pedestrians with many people still working from home.

“The company is trading at a significant loss, which is unsustainable. Sadly, we do not believe sales can be restored to levels necessary to continue to operate,” Caughey said in a statement.

Smith & Caughey’s may yet be saved. Photo / Michael Craig

In his interview with the Herald, Caughey revealed about a dozen options had been considered by the owners to retain the business, including the possibility of closing one of the two stores, or moving to smaller shops.

He said there was no single factor that had forced the company to consider the proposal.

“In recent years, the retail landscape has undergone a significant transformation. This includes the growth of increased competition from new shopping malls, and the rise of retail stores for luxury and prestige brands that has reshaped consumer preference and impacted the appeal of prestige department stores.”

The aftermath of Covid had also meant fewer people coming into the city for work.

That was followed by a “huge drop in consumer confidence and the mounting impact of the cost-of-living crisis”.

“The impacts of the ongoing roadworks and development activity in the area have been disruptive to the traditional shopper who is coming into the city centre less frequently.”

Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor.