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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news