Smiths City: From livestock to legend

By Merv Robertson August 13, 2012 Retail Icon

Just six years from its centenary, this Christchurch retailer, despite its fair share of shakes and speed wobbles, still stands proud on our retail landscape. Merv Robertson looks into the story of Smiths City.

To view a PDF of the complete feature as it appeared in Wares magazine, click the download button at the bottom of this page.

550 Colombo Street, Christchurch was the home of the Ward & Company City Brewery before Henry Cooper Smith (“HC”) bought the place in 1918 and turned it into an auction house. Smith renamed the site the City Market and his business initially traded in grain and produce. Livestock and “general goods” were added and, by 1921, included retail divisions for furniture and hardware.

HC saw opportunities to enhance his business within the farming fraternity, so he leased extra land on St Asaph Street in 1920 and constructed sale yards for livestock as well as premises from which he retailed farm implements. Business was consolidated back to Colombo Street in 1933 and a modern building containing a sale ring was erected and livestock sales by auction took off.

The next five years saw further development and in 1938 a new trading identity was established – a new name that would become famous over many decades. City Market became Smiths City Market Ltd and around this time, its auction focus moved away from horses, cattle and pigs with poultry taking centre stage.

Ian Smith is a grandson of the founder and today he can be found working in the Colombo Street furniture department. Ian recalls childhood dinner time nostalgia as his family sometimes relived those days: “If it was poultry, they auctioned it. They had hens, roosters, geese, turkeys, ducks and even pigeons. One of the family anecdotes which still brings a chuckle is that HC had a number of homing pigeons, selling them by auction on a Friday night. They would all instinctively return to home base over the weekend and be offered up again at the next Friday auction.”

The poultry business continued to do very well right through until the mid-1970s by which time the auction rooms had been relocated to 119 Montreal Street. Around his time (1969), HC’s sons joined the company. Dave Smith, Ian’s dad, had a penchant for sales and marketing while his brother, Ron Smith, was skilled in the building sector.

 

RETAIL BECOMES A PRIORITY AS THE 50s APPROACH

But, back in the day, as the 1940s unfolded, retail became a priority and in 1943 the premises of AR Harris in Dundas Street were purchased. Here the company opened an upholstery factory which produced furniture for the now enlarged retail operation in Colombo Street.

In 1947, Smiths City Market acquired shares in another Dundas Street business called Auto Bodies, right next to the old Harris place. The extended site was renamed Dundas Trading Company and furniture auction rooms were established with the factory in behind, along with another division which produced farm gates.

HC stepped down as Managing Director in the early 1950s and became chairman of the board. His sons, Dave and Ron, assumed joint MD roles with Dave looking after retail and Ron builder’s supplies.

Dave Smith proved to be a dynamic MD, hugely customer-driven and the story goes that sometime in the mid-1960s, he came across a “customer” struggling to load a lawn mower into his ute. Dave rushed across to help, the guy happily drove away and Dave tore a strip off the staff for not giving the man decent customer service. Turns out the bloke had nicked the mower and Dave had assisted with the perfect getaway…

The building supplies and hardware business, a drive-through operation, grew to such a degree under Ron’s stewardship that for a time it was the biggest income and profit earner of the entire Smiths City Market empire. Not only did it supply the people of Christchurch with DIY timber and hardware requirements at retail level, but they also had an almost captive market in the trade sector as well with local builders, plumbers, painters, brickies and the like.

 

APPLIANCES ARRIVE WITH THE SWINGING 60s

As retail continued to flourish, appliances were added and Smiths City Market became a department store. Valve radios, small appliances and later whiteware and radiograms were introduced into a stand-alone home appliance department, circa 1960. The first manager was Maurie Callaghan, who retired a few years later. Twenty year-old Colin Smith (also a son of Dave) ran the ship as stand-in manager until Deni (Dennis) Cave transferred from the trade-in area to take over.

Prestcold was the backbone of Smiths City Market’s new appliance department although it also stocked a small range of Norge refrigeration plus a little Dreco model. Laundry brands were Miss Simplicity wringer washers and the troublesome Whirlpool twin tub. There were Champion, Atlas and Shacklock stoves.

Today, Colin has a challenge for industry vets: “I wonder how many readers can remember Activair cabinet clothes dryers? These were the size of an average refrigerator. In 1968 my Dad took me around to the Moore and Stanley factory in Wordsworth Street here in Christchurch with Dad’s objective being to do a bulk deal on these Activair dryers for the upcoming winter.

“Sir Woolf Fisher was used to going into an F&P store and seeing rows of our whiteware in pristine surroundings and here we were stuck in the back of the shop surrounded by furniture, hardware and carpets”

“He finished up buying an entire production run of 2,000 which we sold for $39.90 [$659 in today’s money]. That was an awful lot of a single item back then but they sold like hot cakes. Small appliances included Kenwood, Sunbeam, Zip, Morphy Richards and Ultimate, with Ralta electric blankets.”

With customers looking for credit options, Smiths City Market Finance (these days called Smithcorp Finance) had been registered in 1953 to facilitate Hire Purchase. The effect on big ticket sales was dramatic and business mushroomed to almost unbelievable levels. So, when the TV transmissions reached Christchurch in 1961, Smiths City Market was primed to take full advantage of the demand because TVs were simply out of the reach for most as a cash purchase.

For example, a Bell 21-inch consolette retailed for £169, or $6,933 today using the Reserve Bank Inflation Calculator. In those days retail was only open during week days with Friday being the late night until 9.00pm. Salespeople had the weekend to themselves.

Ian Smith: “I was only 11 when TV arrived and Dad [Dave Smith] used to always come home for tea Friday nights. I would then go back to the shop with him and lie on the floor watching TV in the lounge suite area which is where the TVs were displayed. It was very exciting and even though I was just a kid, I do remember names such as Bell, HMV, Philips and Pye.”

Retail quickly outgrew the premises and later, in 1961, several shops in Colombo Street, north of Dundas were purchased and gutted to be added to the Smiths City Market street frontage, followed by the acquisition of Sucklings shoe store in 1963. Now Smiths City Market was an imposing landmark as you drove down Colombo Street.

It was at this time in 1964 that the founder of the Smith “dynasty”, Henry Cooper “HC” Smith, dies.

 

DEEPER INTO APPLIANCES

A new shopping mall in the Christchurch suburb of Papanui was planned for 1969. Smiths City Market had committed to setting up a branch here and, with the appliance business on a continuous upward curve, the board decided that it was time to approach Fisher & Paykel for a franchise.

Derek Davies joined the firm from Farmers as Appliance Manager and he had a good relationship with F&P, particularly through Roley Gillette. Davies was influential in the negotiations which eventually resulted in Gillette granting Kelvinator and Whiteway franchises for refrigeration and laundry.

F&P rep, Jim Stenhouse, takes up the story: “Ian Calderwood was the F&P rep when Smiths were first appointed in 1967, I think with Leonard refrigeration and Washrite and Hoover laundry, and I took over from him soon after. By then Roley and Dave Smith had a strong relationship.

“Dave was a wonderful man – a charismatic leader, massive energy levels and an expert on everything. I recall taking Sir Woolf Fisher in to meet him one day. When we were told Dave was unavailable for a short while because he was auctioneering, the look on Fisher’s face was priceless. He was used to going into an F&P store and seeing rows of our whiteware in pristine surroundings and here we were stuck in the back of the shop surrounded by furniture, hardware and carpets.”

That the MD of F&P’s newest customer was auctioneering and therefore not immediately available to see him was beyond Sir Woolf’s comprehension and he questioned the wisdom of the decision to appoint Smiths City Market.

But the Smiths came up trumps “as I knew they would,” adds Jim Stenhouse, and developed into a blue ribbon South Island customer. “Around two years on, Sir Woolf came back to Christchurch and insisted his first port of call was ‘that new dealer’. He was mightily impressed with the transformation and said so. Our two companies never looked back.” Smiths City Market was granted a full F&P franchise in the early 1970s.

Butlers was a little appliance store located near Smiths City Market and was taken over in 1970. This was a strange acquisition as Butlers also sold bikes. In fact, the shop has been described as “a cycle shop which also sold mowers and appliances”. The business relocated to Armagh Street two years later and traded for 10 years as a specialist Smiths City Market appliance outlet.

Shortly after, in 1972, Smiths City Market was floated as a public company, securing funding for future expansion both at home and elsewhere. In 1977 the firm took steps to position itself outside the Canterbury region by purchasing the iconic Dunedin business of Paterson & Barr. At this time Dave Smith was a director of Retail Trading Services (RTS), as was Geoff Paterson, MD of Paterson & Barr.

Also that year, Ron Smith retired. He passed away a decade later.

 

LOOKING FURTHER FIELD

Further expansion came in 1980 with the takeover of Tuckers, a builder’s supplies merchant in Ashburton, which was converted into a department store. Then, in 1983, came big one! Smiths City Market purchased 80% of Noel Leeming Television.

At the time, Noel Leeming himself was desperately ill with cancer, to the point of having his last rites read and Peter Leeming, his brother, took over the reins. Against all the odds, Noel fought back and later resumed command with Peter transferring to Smiths. Noel eventually sold the final 20% across in 1990, the business having continued to operate independently from Smiths City Market throughout the joint shareholding arrangement.

Also in 1983, a young graduate with a brand new BCom joined Smiths City Market in the furniture department. “Whilst at University I had worked part time at Smiths,” says Martin Simcock. “I didn’t really see myself as a full time accountant so I came on board to secure an income until I sorted myself out. After about 7 months I transferred to appliances before becoming supervisor for furniture in Colombo Street.

“Around 1985 I was appointed Branch Manager at Northlands and later became Manager at Riccarton before being shifted to Colombo Street as the first ever Store Manager.” Previously all departments in this shop were managed by the group buyers, virtually as standalone business units so Simock’s job was to bring all departments together as a single branch entity.

“If it was poultry, they auctioned it. HC had a number of homing pigeons, selling them by auction on a Friday night. They would all instinctively return to home base over the weekend and be offered up again at the next Friday auction”

Kevin Smith, son of Ron, had become Managing Director in 1982 and the following year, as CEO of the group, he brought Peter Leeming in as GM of Smiths City Market. Dave Smith remained a board member until 1986 (he died in June 2005).

Further acquisitions came in 1985 with Hopwood Weymss Bendall Company and Coles, which between them had nine stores operating in what we now call the Tasman region.

Now that the company was geographically very diverse, after sales service became a priority and the decision was made to set in place a 100% owned and operated service company. Around 1986, Alectra was founded and the company still operates today with locations in Invercargill, Dunedin, Christchurch, Palmerston North and Whakatane, headed up by Andrew Watson.

By this time, so called big box retailing was gathering momentum. Bulk stacking, discounting and sweet finance deals became the order of the day. Retail had changed forever. Who might fail? Smiths City Market certainly coped successfully but over the next few years there were some casualties, big names included.

Come 1 October 1986, the Government dropped Sales Tax in favour of GST. Martin Simcock recalls: “All of a sudden, retail prices became considerably more affordable and market sizes went through the roof. Those were heady times and I remember 14-inch TVs and VCRs in particular, just went nuts. Discounting was the norm by then too, and in Christchurch we had two of the best such operators in Noel Leeming and Lanes Appliances.

“It was fun and for us, our Hire Purchase option was a winning advantage. We had a large and loyal data base which we worked hard. This locked customers into an HP contract where they bought, say a refrigerator, paid it off and then did the same for a new TV, washer or whatever. It was a great programme and with our product range covering everything for the home, clients really had no need to shop elsewhere.” 

 

BOOM TIME – THEN THE RECESSION HITS

But Smiths City Market had further acquisitions in mind and Irvin & Stern, a long established Auckland-based group with seven shops in the top half of the North Island, was taken over in 1987, following the acquisition of Smith & Brown. Smith & Brown had been going forever and had around 50 stores nationally, bringing Smiths City Market to around 100 outlets.

The synergy seemed perfect, and probably was, except that shortly after the deal was completed, the stock market crashed and a global recession set in.

For appliances, the guy charged with bringing it all together was our old mate, Mike O’Malley. Mike was a baker but by 1977 he was fed up and in December that year decided “enough was enough”. With no selling experience he landed a job at Smiths City Market and started out selling dining room furniture.

“I moved into appliances after about nine months and soon became Assistant Department Manager, reporting to a Christchurch legend, Ray Dann. Later Ray was transferred to Armagh Street and suddenly I was Appliance Manager of Colombo Street and also buyer for the group.”

When Smiths purchased Irvin & Stern, Ray was appointed Group Divisional Manager for appliances. Another Ray, Ray Anderson, was Irvin & Stern’s buyer, Ross Palmer looked after Patterson & Barr in Dunedin and Jim McCrenna was in charge of Coles in Nelson.

Mike O’Malley continues: “The four of us formed a buying team and with I&S, P&B and Coles continuing to trade under their own identity. Ray, Ross and Jim still bought their own day to day requirements, but I was responsible for national deals and supplier trading terms. The Irvin & Stern takeover seemed a little strange to me at the time as unlike the rest of the Smiths group, they were not Fisher & Paykel dealers, marketing ‘alternatives’ such as Westinghouse.

“Next year the big picture became clear as Smiths City Market bought Smith & Brown. The takeover took effect in October 1987 and two weeks later the share market crash happened. Bloody good timing, eh! I was asked to move to Auckland as group product manager for appliances, responsible for the whole country. Doreen, my wife, agreed and in January 1988 off we went.”

Mike O’Malley’s job was never going to be a picnic, regardless of the immense buying power of the new “super group”. Irvin & Stern and Smith & Brown had been fierce competitors for decades and now three cultures with three operational systems had to come together as one team with one system. All the buildings turned Smiths yellow, the names all became Smiths City Market and Irvin and Stern sales people had to become F&P salespeople overnight.

Despite the drop in consumer confidence caused by the crash, the internal politics, the stress brought on by those factors and responsibilities beyond his wildest fantasies, Mike O’Malley was greatly stimulated by the situation he now found himself in. “These were extraordinary times for a baker’s boy. Really exciting times but sadly, tragically in fact, the trading conditions were too tough.”

 

RECESSION FORCES RESTRUCTURE

Given the extreme pressure on consumer spending following the crash, there was a need for restructure and the Group was split into separate trading companies in 1988. The word “Market” was dropped from Smiths City Market and, with Noel Leeming and Alectra remaining untouched, all stores were rebranded to trade as Smiths City for homewares (including appliances) and Smiths City DIY for builders supplies and sporting goods.

In 1990 the Smith family connections to the board were severed. Craig Boyce became Managing Director, joined on the board by Bill Revell as Chairman, Ian Farrent, Tim Rattray, and John Holdsworth.

But things remained dire and between July 1990 and March the following year there were a significant number of store closures, mainly in the North Island and on 1 May 1991, the group (with the exception of Noel Leeming Television) was placed into the hands of receivers.

The remaining North Island stores were sold to the ill-fated Brinkleys consortium, while Noel Leeming was sold to Roger Bhatnagar and Greg Lancaster. A future was seen for Smiths and a new company was formed called Smiths City (Southern) Limited, operating only in the South Island and trading in receivership.

This was when the now Group Managing Director, Rick Hellings, came across from his position of CFO with Noel Leeming, to become Group General Manager of Smiths City, reporting to Craig Boyce.

With the company retrenching back to Christchurch, Mike and Doreen O’Malley also moved back home, although they soon migrated North again as they made the decision to pursue life after Smiths City. O’Malley’s place as Group Product Manager for appliances and consumer electronics was taken by Martin Simcock and Richard Hopkins became Colombo Street Branch Manager.

“The appliance role was expanded at that time to include the sports category where Tony Walker was Product Manager,” recalls Simcock, “and many readers will know Tony as he went on to become a successful group buyer and divisional manager in the appliance sector.”

Smiths City (Southern) made outstanding progress and on St Patrick’s Day, 17 March 1994, was released from receivership, the first publicly listed company in New Zealand to do so. In October the year before, the High Court had approved a five year Scheme of Arrangement during which time all creditors would be repaid.

After this, on 31 October 1998, Craig Boyce left the top retail job to become Chairman and was replaced Rick Hellings. By this time Martin Simcock was Divisional Manager Appliances, going on to become GM for Smiths City in the year 2000. Currently he is Group General Manager.

 

POWER BOARDS MEAN MORE EXPANSION

Back in the day, power boards throughout the country held a strong position in the appliance industry and they got up the nose of other retailers by offering consumers the ability to buy appliances and pay them off at low interest on their power bills.

However, in the 1990s power companies started to divest themselves of retail. In this light, the Christchurch power supplier Southpower sold its appliance operation to Smiths City in 1997. So Powerstore was born and now its eight South Island stores are an important part of the Smiths City Group, headed up by Craig Balfour.

1998 marked the 80th anniversary of a company which bore absolutely no resemblance to that established by HC Smith way back in 1918 but of much more significance was the fact that for the first time in ten long and difficult years, shareholders were paid some dividends!

Rice Refrigeration, or Rices as it later became known, was a veritable institution in Southland and in 1999 the Smiths City Group purchased the famous business and rebranded it Powerstore, although for several years it traded as Rices Powerstore as a transitional strategy.

Y2K saw a new Powerstore branch open in Dunedin and in November that year, the purpose-built Smiths City Megastore was opened in Northwood, Christchurch. Group sales passed $150 million for the first time.

The board was determined to re-enter the North Island and in 2004 the company bought the Bay of Plenty group, Meikles. A year later a purpose-built store was opened in Palmerston and 80% of Wellington icon LV Martin was acquired with 100% ownership achieved two years later. Since then, Gisborne, Upper Hutt, Lower Hutt and Porirua have also opened.

Although the net is wide spread, all buying is centralised in Christchurch.

So here they are today. Some 94 years have passed since HC Smith signed the paperwork to buy the Colombo Street brewery and this iconic business, despite the desperate trials of receivership and earthquakes, still stands proud on our retail landscape.

The Smiths City board now has Craig Boyce as its Chairman, joined by Rick Hellings, John Dobson, John Holdsworth, Gary Rohloff and Sarah Ottrey. The company employs over 700 people and has 1,600 shareholders. 


 

A MAGNITUDE OF CHANGE

At 4.35am on Saturday 4 September 2010, a magnitude 7.1 earthquake struck Christchurch causing widespread carnage but miraculously, no fatalities. Smiths City’s stores suffered only superficial damage and it was pretty much business as usual.

However, on Tuesday 22 February 2011, a 6.3 magnitude quake devastated the city and completely demolished the Smiths City Colombo Street car park. The store itself was severely damaged and Powerstore on Moorehouse Avenue terminally smashed.

Tragically, this time mother nature claimed the lives of 181 people, 4 of whom remain unidentified. The dedication, determination and number 8 wire attitude shown by Cantabrians and others rushing to help, is epitomised in Rick Hellings’ account of the Smiths City experience.

“Since the September 2010 event we had had many scary shakes so I reckon our evacuation skills were pretty well honed. On Tuesday 22 February last year we were in the middle of a board of management meeting when the biggie hit.

“In 45 seconds the top floor was evacuated and within a minute or so every staff member and all customers were on the street. Bits kept falling off the shop, the car park was flattened, chaos was everywhere and it was obvious the city was in big trouble. Thankfully, we quickly ascertained there were no serious injuries or deaths at Smiths City.

“Next day, Martin Simcock, whose house was ruined beyond repair and Noel MacDonald, our General Manager Finance, made their way to my place for a council of war, so to speak. No doubt about it, we had a disaster on our hands.

“We had a company-wide disaster recovery plan in place, mainly in case of fire at our head office and this was a back-up AS400 out at our Alectra premises in Sockburn, hard wired to the mainframe in Colombo Street. On the Friday following the quake we had a bit of luck.

“Next to our car park was a big Pak n Save. Every supermarket on the Eastern side of Christchurch was closed meaning 150,000 people had no access to a supermarket. Civil Defence prioritised that this shop, ahead of all others, had to be reopened. This meant taking what was left of our car park down, which meant taking the wall off the side of our retail building.

“They needed us on-site to make sure all services were cut and to brief them on the construction so they could safely dismantle the wall. Twelve of us rocked up but only three were allowed inside the shop. We walked the demolition crew through the downstairs area and a couple of us then rushed upstairs to grab the advertising server, the payroll server and the main accounting server.

“Then, as the demolition team went upstairs to check things out, we ran back down and took a heap of laptops out of stock, stowing them and the servers in a bunch of suitcases, again out of stock and wheeled them outside. The cops were livid and gave us a right bollicking. For a moment I thought we would be arrested and fair enough, they had massive safety concerns.

“We worked throughout the weekend and by Monday we had people sitting at tables with laptops, carrying on with business by way of the back-up AS400. Eventually we moved 90 people out to Sockburn working alongside the 40 Alectra staff. Many of them had wrecked homes, some were sleeping in tents and more still had moved in with relatives, but they all came into work each morning. Incredible fortitude!

“For the first two weeks over 100 people used the Alectra premises for toilet, shower and laundry facilities and in all, it took nine weeks before everyone could return to ‘home comforts’. Everything was gender neutral, rank neutral.

“My wife Sarah and daughter Kate moved out to our holiday home in Hanmer, where they were joined by Heather Brown of Parex who most generously allowed Noel MacDonald and I to bach in her house, no power or water. At the same time, Noel’s family moved out to Swannanoa while the Simcocks stayed put, even though their home resembled a bomb site, until they moved to a new place last October.

“Having been gifted those four hours’ access back on 25 February last year, we were unable to get back onto the Colombo Street site until the last week of July. Then at last we opened stage one of the revamped shop on 17 November 2011, the biggest single store, single day’s turnover in the history of the company.

“There are too many wonderful stories of dedication, innovation and sacrifice to tell here, but one thing’s for sure, Smiths City people must have yellow blood flowing through their veins. I’m in awe of how they conducted themselves and mobilised themselves through horrific times. Well played, team – now look forward to our centenary in six years’ time!”

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