Closure of Kirks a sign of the times

David Jones’ arrival in Wellington has been welcomed by retail experts, but they say the closure of Kirkcaldie & Stains’ highlights the uncertain future of such stores.

In announcing the store’s closure next year, ‘‘Kirks’’ chairman Falcon Clouston said retailing had changed greatly in the last decade for stores like his. Social media, internet research and price comparison sites played a much bigger part in the shopping habits of younger consumers and expectations were higher.

Kirks, whose customer base was largely aged over 50, was finding it costly to keep up, he said.

‘‘I think as a single large-format store we lacked the scale to compete with the multistore regional and global operators and the brands that are beginning to dominate that new landscape.’’

Clouston said the store would have had to pay about $12 million if it had chosen to refurbish.

The third option had been to reduce its line of products and shrink the store. He said bringing David Jones to Wellington was a more positive option.

Chris Wilkinson, of retail consultancy First Retail Group, said the news was an outstanding result for Lambton Quay’s retail pull. ‘‘This will be a real differentiator on the golden mile. The store redevelopment will give us one of the most up-to-date shopping precincts in Australasia when you combine the recent developments of Glassons, Forever New, Nespresso and Lambton Square.’’

Wilkinson said David Jones fitted a similar market and consumers would be familiar with the brand. It would bring many new labels to the city and he would be keen to see if David Jones replicated its food hall concept, which had been popular in Australia.

Collier’s retail real estate agent Ty Dallas said the Australian store had wanted to expand to New Zealand. ‘‘David Jones is going to succeed where Kirkcaldies couldn’t, simply because of its purchasing power.’’

David Jones’ chief executive Iain Nairn said he had no qualms starting out in Wellington. He said his company had not been on the lookout for the Kirks site but had seen the potential when approached. ‘‘I guess the difference between us as a retailer is our experience of New Zealand in the wider group. The Country Road group . . . we have 35 stores and 500 staff already in New Zealand. Obviously Auckland is the biggest market but we strongly believe in the Wellington market. It truly understands fashion.’’

Retail commentators noted that the pressure that Kirks was under was being felt by other department stores.

Christchurch’s Ballantynes had recovered from the earthquakes, but last month Dunedin’s Arthur Barnett was sold to Southland-based H & J Smith. Figures from retail intelligence firm Marketview show sales for the four main department stores, including Auckland’s Smith and Caughey, fell 5.5 per cent over the March year.