BUSINESSDESK: Selwyn and David Cushing have edged closer to the takeover threshold in Kirkcaldie & Stains, the iconic Wellington department store owner whose property assets are worth almost twice the company’s market capitalisation.

The Cushing family’s investment arm, H&G Ltd, increased its stake in the company to 18.49% from 17.08%, according to a substantial security holder notice to the NZX.

H&G picked up the 144,000 shares in 15 separate trades this month, underlining the difficulty in acquiring the illiquid stock.

Kirkcaldie’s Harbour City Centre building has an August 2011 valuation of $46.5 million, which will increase to $48.7 million when earthquake strengthening is completed. At today’s share price of $2.68, the company is valued at $27.5 million.

The Cushings paid between $2.68 and $2.75 apiece for shares, or a total of $387,917, the statement says.

They first appeared on the register in 2006 and were joined last year by veteran corporate raider Sir Ron Brierley, who disclosed a 5.7% holding in September.

"At this price we have been very happy to add to our holding, we will be heading to 19%," David Cushing told BusinessDesk. "At this stage we are happy to accumulate shares” and there are no plans to make a full takeover though he added “never say never”.

The NZX-listed company operates its flagship store on Wellington’s Lambton Quay and the Harbour City Centre, a historic six-floor retail and office building next door.

"It is an interesting company with some prime Lambton Quay real estate,” Mr Cushing said. “That is an attractive long-term asset and we are long-term investors."

Kirkcaldie told shareholders in February it was looking to expand its property arm amid ailing retail sales. The company has struggled to attract customers without discounting goods since the global financial crisis prompted households to focus on repaying debt.

The store’s exposure to Wellington also means it has been hit with a double whammy as the government’s austerity plans slash jobs in the public sector, which pads out the city’s consumer base.

In April, the company posted a wafer-thin first-half net profit of $11,000 in the six months ended February 28, down from $380,000, a year earlier. It flagged a full year pretax loss.

The shares, which trade infrequently, have shed about 12% this year.