Wellington department store, Kirkcaldie & Stains has lost $531,000 in the six months to the end of February with sales down 5.6%.
Managing director John Milford said the loss from retail sales had narrowed, but it's still a tough market.
The store's property operations also lost nearly $400,000 before tax over the same period.
Mr Milford said Wellington's economy does not seem to be as buyant as Auckland or Christchurch
He said the company has spent $12 million on redeveloping and earthquake strengthening its buildings, which is due to be completed in August. Last year for the same period, its property company made a profit, but not this year.
Rates and insurance premiums have since risen.
No first-half dividend will be paid.