The Christchurch-based furniture and appliance retailer, Smiths City, has been sold to investment fund Polar Capital for $60 million.
File image. Photo: Google Maps
The sale involves all of Smiths City Finance and the majority of its 29 stores.
The seven shops that are not included will be closed dependent on the lease transfers and new lease terms being agreed on.
Smiths City said the purchase agreement included offers of employment for approximately 75 percent of its 465 staff.
The value of assets will be transferred to Polar Capital at around $60m, however the purchaser is assuming some debt and other liabilities and the net amount to be received is $8m.
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Polar Capital is owned by Colin Neal, the founder of the refrigerated logistics company, Big Chill.
Smiths City chairperson Alistair Kerr said they signalled at the end of March and earlier this month that the Covid-19 pandemic had delivered a material and significant shock to the business.
''In addition to taking steps to preserve cash and contain costs in the face of these new trading conditions, the board has explored numerous options to secure an injection on new capital.''
''These efforts have included discussions with our existing largest shareholders and other potential strategic investors, to underwrite a broader capital raising.''
Kerr said that it had become clear that the sale offered the greatest opportunity for Smiths City to endure for the long-term.
"It also offers the greatest opportunity to protect the jobs of many of our staff as we can in this uncertain time.''
Colin Neal of Polar Capital said Smith City had been part of the New Zealand retail landscape for more than 100 years.
''It is a trusted brand that has been synonymous with providing great quality, excellent value and attentive no-nonsense service.''
Neal said all Smith City's customer commitments would be honoured.