Smiths City shares on trading halt again

Shares in homeware retailer Smiths City are on a trading halt for the second time in two months.

After negotiations with its bank in March, Smiths City flagged earlier this month that the closure of some stores and job losses was likely as the retailer restructured.

The furniture and electronics retailer told shareholders on May 6 that it expected consultation with its 465 staff and its landlords to take just over two weeks, after which the board would decide on the final plan.

NZX Regulation placed a trading halt on Smiths City shares yesterday afternoon which would remain in place until the company released an announcement or until the market opened on Wednesday, May 20, whichever came earlier.

Smiths City was put on a trading halt in late March.

That was lifted after the retailer secured support from its bank, ASB, but it said at the time it was looking for more funding while its stores remained shut amid the level 4 coronavirus lockdown.

ASB had agreed to delay by four weeks the repayment of $1.5 million of Smiths City’s $65 million Senior Secured Facility, which had been due on March 31.

At the time, Smiths City believed it had enough capital to cover its debts, but said its capital structure was not sustainable and it had to secure more funding.

Consultant Chris Wilkinson of First Retail Group said at the moment any business in the discretionary category would be doing a lot of navel gazing and looking at the future under the new normal.

Smiths City, founded in 1918 and operating in 30 locations, was a very important part of many regional New Zealand economies, he said.

‘‘They’re in many of our smaller towns, our provincial towns, they are decent employers, they’ve got large format stores, and so any challenge to a business like that is a concern because we want to keep people spending in those local places, we want to maintain relevance and employment and all those aspects and Smiths City has been purchasing New Zealand products.’’