Local stores tipped to escape worst

Dick Smith's flagship Auckland store is at 21 Queen St. Photo / Dean Purcell

The announcement of possible store closures in the Dick Smith chain will probably have some ramifications for the New Zealand portfolio of 66 stores, but widespread shop shutdowns are unlikely according to a retail leasing specialist.

Nathan Male of Metro Commercial, which leased the consumer electronics business its flagship Auckland CBD store at 21 Queen St, said the business and store sizes had been evolving and the chain might have some stores not ideally suited to its current business model.

But that was no different for any large retail chain, he said.

"Unless you have a static business model, it is almost impossible to have a perfect retail property portfolio. A good example is the recent closure of the Dick Smith store in Link Drive on Auckland's North Shore, where Metro negotiated the surrender of DSE's lease, and re-leased the site to another prominent national retailer.

"At the same time, through Metro brokers Corey Gooch and Erin Palmer, Dick Smith have committed to move to a larger store in Manners Mall, Wellington," Male said.

Australia's Woolworths announced this week that it planned to restructure Dick Smith, including closing up to 100 stores here and in Australia with a view to an eventual sale. The chain has about 386 stores but a decision to close a large number was widely predicted because of poor sales.

Male indicated the chain had many options here.

"While some stores may be earmarked for disposal in New Zealand, we would envisage most of these will be via the natural expiry of leases in non-core locations," he said.

In New Zealand, Dick Smith operates from many of the Westfield-owned malls, including Westfield Riccarton in Christchurch.

The chain's main Auckland store is in AMP NZ Office's block facing Queen Elizabeth II Square on the corner of Queen St and Customs St. The retailer opened there in 2009 after the large office block had a $70 million upgrade and refurbishment.

At the time, Male said it was an area game-changer.

"This is probably the single largest retail leasing deal in Queen St in the last decade," he said then, citing Queen St changes with retailers gradually moving towards the waterfront end of the stretch.

Dick Smith also operates from Wyndham St, St Lukes, Onehunga, Newmarket, Karangahape Rd, Takapuna, a large-format store at Kiwi Income Property Trust's Sylvia Park at Mt Wellington and from New Lynn.

In Wellington, Dick Smith operates from Vivian St, Manners Mall, Featherston St, Lyall Bay, Johnsonville, a big-format store in Lower Hutt's Queensgate, Porirua, Upper Hutt and Kapiti.

DICK SMITH

* 66 New Zealand stores.
* Employs about 1100 people.
* Operating here for 30 years.
* 386 Australasian stores.