Smith and Caughey's on Queen Street in Auckland. Photo: Supplied / Smith and Caughey's
Smith and Caughey's chairperson says a cyber attack on the Auckland retailer came on already awful day after it had announced a proposal to close its doors for good.
Following the Wednesday's shock announcement of the department store's proposed closure - a cyber attack locked all of its server and retail operations systems forcing its two stores to remain closed.
It means the store, which has been in business for about 144 years, is unable to communicate with suppliers and stakeholders during what the company says is an already sad and stressful time.
"Our website is working, so people will be able to shop online today" - Tony Caughey
Smith and Caughey's chairperson Tony Caughey told Morning Report the cyber attack compromised its systems so it could not open its physical stores today.
But people would be able to shop at Smith and Caughey's online on Thursday as that had not been affected, he said.
"It also had the affect of restricting our ability to communicate with people, our stakeholders about the big announcement, so many of our suppliers heard it on the media before they heard it from us and that wasn't the plan, so we were compromised in what we could do yesterday."
A team was investigating the cyber attack but the situation was changing all the time and it was premature to speculate on reasons for the cyber attack, he said.
Caughey said about two years ago they realised that Smith and Caughey's existing model would not work in the changing retail landscape.
Since then they have been looking at a range of options the store could take to thrive in the changed retail environment, he said.
"We've had independent professional advisors check all our numbers, we've got their thoughts on what's happening internationally - what we could put in here.
"The end of those investigations we got to the point we really couldn't find a way to give us the returns on the investment that were needed to make it last, so that forced us into the situation we got to yesterday."
The Smith and Caughey's buildings are owned by the company and a decision about them would be made if the decision to wind down retail activities was made at the end of a consultation period, he said.
In the long-term there would likely be development opportunities for the building with the Te Waihorotiu train station opening and a new Radisson hotel opening in Queen Street, he said.
'Sad day for Auckland' - Smith and Caughey's fan
"As more and more shops, particularly such as this, close down the reasons to actually go into the city are becoming less and less" - Miriam Whelan
Miriam Whelan enjoyed the flagship store as a child and three generations of her family have worked there. She said Smith and Caughey's proposed closure was a sad day for Auckland.
The nail in the coffin may have been the road works which had "crippled the centre of the city for a long time", she said.
It was emotional to go back there, she said.
"You walk in the door today and it's a similar feeling to when I worked there as a student, you know 35 years ago. There's certainly that feeling of family, of connection, of something special that's going to be lost."
The Caughey family had instilled family values among staff at the store back in the day and that was still evident now, she said.
It must have been a very tough decision for them to consider closing the store, she said.