The Smiths City Group’s trading arm will buy both the business and assets of Furniture City and its logistics operation, which is called Lucky Dragon, subject to a conditional agreement.
Furniture City has two stores in Auckland, one in Whangarei and an online store and a distribution facility. It’s owned by chief executive Roger Butcher and Jan Baker.
The acquisition will build on Smiths City’s current chain, made up of 33 stores which only extend as far north as Tauranga.
The bulk (80 percent) of Smiths City’s sales take place in the South Island.
If successful, the purchase will help the retailer expand its operation to a national level, while giving it a presence in Auckland, New Zealand’s biggest city.
“We have been in need of an Auckland presence for some time,” Smith’s City chief executive Campbell told BusinessDesk.
“With the acquisition by Smiths City of Furniture City we become a true national retailer in New Zealand. There’s great synergies between the two companies and it’s a logical move.”
“Smiths City has a new leadership team, fresh energy and determination to keep building on its solid base,” he said. “We think they will be quiet achievers and could take the decisive lead in terms or trusted in the furniture and appliance field after.”
Campbell came on board chief executive in May last year. He replaced Rick Hellings, who had spent 30 years at the helm of the company.
In December, Smiths City began consolidating its stores to be under one brand.
Its two Wellington-based LV Martin stores that it has owned for more than ten years were renamed Smiths City.
“LV Martin changing its name to Smiths City is a coming together of two retailers with very similar mind sets. We’re a genuine, Kiwi-owned company, with a southern heritage that stretches back more than 85 years,” Campbell then said.
“Merging the two brands will provide customers with a better offering as we’ll be introducing new products and a wider range of furniture and bedding.”
The Furniture City agreement is subject to Smiths City obtaining finance and completing due diligence by 29 February, with a settlement expected on 1 April.