Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kirkcaldie to recapitalise retail unit once property sold

Kirkcaldie to recapitalise retail business once Harbour City Centre sold

By Paul McBeth

Feb. 20 (BusinessDesk) - Kirkcaldie & Stain’s, Wellington’s up-market department store, says it will recapitalise the ailing retail business after the sale of its inner-city office tower before returning any surplus to shareholders.

The Wellington-based company plans to overhaul its retail offering to deal with rising inner-city rents and increasing competition from online rivals, and will use a portion of the funds raised from the sale of its Harbour City Centre on Wellington’s Lambton Quay towards building a viable business, chairman Falcon Clouston told shareholders at last night’s annual meeting.

“Before we have any discussion on a surplus distribution to shareholders we must first recapitalise the retail side,” Clouston said. “Some shareholders may not want to take the risk of owning an omni-model retail business and we may need to re-organise the shareholding of the retail business.”

As a result of the decision to sell the Harbour City Building, which was last valued at $50 million, fund manager Chris Swasbrook of Elevation Capital withdrew his nomination seeking a seat on the company’s board.

In a letter read by Clouston at the start of the meeting, Swasbrook said he supported the decision to sell the building and to restore the retail business to profitability.

The $50 million valuation put most of the value in the front building, which counts Contact Energy as an anchor tenant, and included just the bare land value for the back building, which will need to be earthquake strengthened or demolished, Clouston said.

Managing director John Milford said the company won’t sell the building cheaply: “It’s a premium property and we will get the maximum dollars for it.”

Among the initiatives to improve the retail business, Milford said the company plans to expand it online services, introduce a home brand shared with other New Zealand department stores, and is looking at setting up a furniture store on the city fringe.

“We can’t make money out of 150,000 people in Wellington, we need 4.6 million people in New Zealand to make a living,” Milford said.

Milford said online competitors were eating into local retailers due to the government’s limit on charging GST on overseas goods, and that something would need to change to make up the shortfall in excise duty.

He also took a swipe at Wellington City Council for failing to support retailers after last year’s earthquakes closed two car-parking buildings and didn’t try to encourage consumers to come into the city during the Christmas period.

In response to a question form a shareholder, chairman Clouston said Kirkcaldie’s won’t resume dividend payments until the retail business returns to profitability, which might be in the next financial year.

The company’s shares were unchanged to $2.40 yesterday, and have gained 26 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news