Kirks hit by online absence

An after-tax loss for department store Kirkcaldie and Stains has been blamed on stagnant consumer confidence, a lack of an online shopping presence and a quadrupling of insurance premiums.

The Wellington-based group recorded a $773,000 loss to August 31, compared with a $56,000 loss the previous year.

Managing director John Milford says he expects another tough year ahead, but a “much improved” result.

He says the retail climate in Wellington continues to be challenging, with official figures showing the region is one of the lowest performing in the country.

Adding to the uncertainty is the increase in internet shopping. Kirkcaldie and Stains was lacking an internet shopping presence until last month.

The department store has started selling a limited number of cosmetics online, with the goal of having all lines on the site by May.

Mr Milford says the gross margin percentage decline of 1.6% was due mainly to last year’s $2 million overhaul of the store’s IT systems, which including new point of sales software, a new merchandise system and new customer relations system.

The company’s property division helped keep the total losses lower, reporting a pre-tax profit of $908,000 – an increase of 45% over the previous year.

The result has been put down to rental income from the new Country Road store and reinstatement of rental income in April from the redeveloped and earthquake strengthened space leased to Contact Energy.

The company says this result was achieved, despite an increase in annual insurance premiums from $235,000 three years ago to more than $1 million.

However, it expects on-going redevelopment work in its Harbour City Centre building to negatively impact on the property division this year, as two floors will have been vacant for eight months.

The refurbishment includes a long-term agreement with Contact Energy and a $6.5 million development of levels four and five of the building, along with common areas.

Company chairman Falcon Clouston, who is also a member of the New Zealand Markets Disciplinary Tribunal, expects this year to be another tough one for the retail sector.

However, he says two key changes – consolidating retail from two buildings into one and moving the corporate office out of Wellington cbd will help reduce fixed rental costs paid by the retail business to the property division.

Kirkcaldie and Stains decided against issuing a dividend to shareholders.

bcunningham@nbr.co.nz

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Oh, you sometimes feel sorry for an establishment like Kirkcaldie and Stains, and do you also wonder how out of touch with the world the people are who run these iconic shops. “A lack of an online shopping presence” is one of the reason for its bad performance. A 10 year old would have told them five years ago this was a problem. But you can see the Old K&S board, ‘hurmph on line that’s not for 'Kirks' clients, ours prefer to shop in store” Well K&S welcome to OUR world. PS: Your web page is woeful!

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Versace or Armani suit and high-end women's clothing don't seem to suit a government-orientated city. Perhaps a more realistic approach to buying and a culling of what appears to be bored and under-utilised staff would help the process back to the "black".

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It’s not just the absence of an online shopping facility it’s the fact that much of their goods are NOT quality products but exorbitantly priced Chinese rubbish!

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I am a customer/card holder of over 35 years standing - never once have I been adequately canvassed for my views - my friends who have the same relationship to the store say the same. The "evenings" for fashion were always well attended but the most senior manager present never welcomed people to the store or said how grateful the store is for the business - if you want the business you have to ask for it. Its not just "bean counting" you have to make the customer know you really, really love them in the world of today.

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As a bean counter I don't accept that blatently poor management is the bean counters fault. It is the fault of those that mismanage so fire your shots at the Board and the General Manager and the b/s they peddle

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