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The news H&J Smith’s Gore store is reducing its scale of operation is devastating, Gore Mayor Tracy Hicks says.

“I’m really devastated that they are going to be reducing their scale of operation in our town to the level that they are,” Mr Hicks said.

H&J Smith Group managing director Jason Smith announced on Monday the business was proposing to reduce the size of its retail division, including the Gore store, to secure its long-term future.

Under the proposal, H&J Smith stores in Dunedin, Mosgiel, Balclutha and Te Anau would all close, while H&J Smith in Gore would reduce in size and the Take Note store in Gore would relocate, he said.

Thirty-four part-time and full-time people were employed in the Gore store.

The Armoury Store in Dunedin and Outdoor World at Remarkables Park in Queenstown, also owned by the H&J Smith Group, would also close.

Closure or downsizing at stores might occur between August and February.

Details would be confirmed as part of the proposal process and staff would be kept fully informed. The proposal was under consideration, and a final decision would be made early next month.

Mr Hicks said it was sad for all concerned the business, which had been in Gore for more than 100 years, was downsizing.

In order to survive as long as it had the business had made many changes over the years, he said.

“I think what they are doing now is recognising the challenge that the retail scene presents; the changes that have happened not just through the Covid-19 but also the trends that have been getting stronger and stronger and demands from the public that want retail delivery done in a different way.”

The Gore store opened in 1905 in the Criterion Hotel, and moved to its own building in 1913.

In 2004 the company sold the building and continued to lease it.

Two years ago the two-storey operation was consolidated on one floor.

Mr Smith said the company had been significantly impacted by the Covid-19 pandemic and needed to consider options for managing its business through what was anticipated to be a long, slow economic recovery.

“Our retail division has been grappling with increasing wage and compliance costs, issues around store size and scale, difficulties securing supply, new entrants to the NZ market and the increasing dominance of multinational chains,” Mr Smith said.

“None of which is dissimilar to the well-documented challenges facing department stores around the globe.”

The business also had an ageing store network in need of capital expenditure to upgrade and modernise to meet future customer needs, which was not prudent given the ongoing uncertainty post-Covid.

“It’s against this backdrop, and a firm desire to continue to operate sustainably well into the future, that we are proposing to close or reduce in size all but our flagship H&J Smith department store in Invercargill, including Paper Plus and Outdoor Invercargill, and our H&J Smith department store at Remarkables Park in Queenstown.”

The company has been operating since 1900.

“To be here for 120 more, it’s now very clear we need a long-term view.”

Mr Smith acknowledged the impact on staff, customers and suppliers.

“It’s been a particularly difficult couple of months for our staff with the challenges of Covid-19 affecting how we deliver service to our customers.

“They’re at the forefront of our minds as we work our way through this difficult process as quickly as possible to minimise further uncertainty for them.”