Smiths unfazed by election effect
Shoppers are dropping out in the run-up to the general election, according to Smiths City chairman Craig Boyce.
He told shareholders at the company’s annual meeting in Christchurch yesterday that competition in recent weeks had been intense, partly fuelled by online shopping.
Boyce said elections always seemed to cause people to delay spending decisions and he suspected the Reserve Bank’s tighter loan-to-value lending criteria for first-home buyers was having an effect.
Online retailing was having a big effect in its ability to help buyers compare prices immediately through smartphone applications.
Smiths City had a ‘‘price promise’’ that it would match any other retailer’s advertised prices, Boyce said.
Softer trading conditions across the board have been reported by banks and electronic card transfers.
The competition and soft spending pattern since June was evident in the closure of JB Hi-fi’s appliance store at Auckland’s Westgate Shopping Centre and a recent $2.7 million loss for its New Zealand operations, Boyce said.
Smiths was about halfway through its rebranding of Furniture City shops it acquired in Whangerei and Auckland more than a year ago to lift its market share in the North Island.
It had also launched its ‘‘live better’’ brand in Hastings, with Whangerei next on the rollout.
Boyce said Smiths’ finance division was significant for sales because it allowed people to purchase items they might not otherwise be able to afford.
Chief executive Roy Campbell said the Auckland Furniture City stores in Mt Wellington and the North Shore would soon be rebranded to Smiths City.
The range of products sold had been rationalised, and inventories had been reduced 10 per cent without affecting trading, he said.
Boyce paid tribute to director John Dobson, who has decided to retire after 23 years with the company. A replacement is being sought.
Dobson said his mentor had been been the late Bill Revell, who oversaw the rehabilitation of Smiths after it went into receivership for several years following the 1987 sharemarket crash.
Director Sheena Henderson was reelected unopposed.
Boyce said an extraordinary meeting would take place in November where a 75 per cent majority of shareholders would be asked to ratify a special $5.7m repayment to shareholders.
The only question was from the Shareholders’ Association, which asked about the stake held by entities associated with Sir Ron Brierley.
Boyce said that, at just under 20 per cent, the two companies involved already had the maximum allowable stake before a takeover notice was required, ‘‘so they won’t be buying any more’’.
As at last year’s meeting a Brierley representative voted against the reelection of several directors.
The meeting was well attended by about 50 shareholders, with none of them querying company performance.
As previously reported the trading profit was $2m on revenue of $227m for the year ending April 2017, up on the previous year’s $1.3m profit and turnover of $221m.