Smith’s City chairman, Alastair Kerr, has taken the time at its annual meeting to list some of the company’s short-fallings which may be responsible for its $7.2 million loss.
“What I want to make clear is that this is not going to be a quick fix,” said Kerr to the board. “Nor is it going to come cheap. Significant investment in the basic infrastructure of the business is required. We need to continue to refresh our store formats and implement modern information systems ... We also need to continue to invest in the product range and the training and development of our people.”
Chronic underinvestment, a lack of understanding of what customers want, and seriously deficient IT systems were just some of the criticisms he had. The comments come at a time where the 100-year old retailer is seeing caught in a slump; a $7.2 million after-tax loss in the year to April 2018.
“We have not been selling the products customers want and we have not been making the most of the customers that walk in the door,” Kerr claimed.
The company took a $4.9 million hit for leases on unprofitable stores it had to close, including all the appliance-only stores. And it was stung for $1.5 million by an Employment Court decision in May that staff attending so-called “voluntary” morning meetings, held in all stores before they open each day at 9am, must be paid for being there.
The retailer also announced in July this year that as part of a renewed commitment to staff, it would be paying at least the living wage of $20.55 in 2018 to all employees from the beginning of October.
Only when the company “is growing and sustainably and generating cash in excess of its investment requirements” will it start paying a dividend again, Kerr said. Dividends were suspended in June.
The shares were unchanged at 34.5 cents, having slumped 43 percent so far this year.