It felt like a gut punch. For anyone who grew up in Southland or Otago, H and J Smith wasn't just a place where you bought school uniforms or high-end kitchenware. It was an anchor. When the announcement dropped in mid-2023 that this 123-year-old institution was shutting its doors for good, it wasn't just a business story. It was the end of a retail era that survived World Wars, the Great Depression, and the rise of Amazon.
But honestly? If you looked closely at the balance sheets and the shifting sands of New Zealand’s regional economy, the cracks were there long before the final "Closing Sale" signs went up.
Why H and J Smith Couldn't Survive the 2020s
Retail is brutal right now. You've seen it yourself—the high street looks a lot different than it did ten years ago. For H and J Smith, the struggle was a perfect storm of aging infrastructure and a business model that was increasingly out of step with how younger Kiwis shop.
The Invercargill flagship store was massive. We're talking about a footprint that covered a significant chunk of the CBD. Maintaining a building of that scale requires an enormous amount of capital. Back in the day, having "everything under one roof" was a massive competitive advantage. You could get your hair done, buy a fridge, and pick out a designer dress in one trip. Today, that’s a liability.
Specialty stores and online giants have chipped away at the department store's lunch. Why go to a big store with limited selection when you can browse 5,000 pairs of shoes on your phone?
The Earthquake Problem and the $100 Million Question
People often forget the physical reality of running an old-school department store in New Zealand. One of the biggest nails in the coffin for the Invercargill site was the seismic strengthening requirements.
It’s expensive.
The H&J Smith Group, led by Managing Director Jason Smith, faced a terrifying reality: the flagship store required significant remediation to meet modern building standards. We aren't talking about a few thousand dollars here. Estimates suggested that a full redevelopment of the site could cost upwards of $100 million. For a family-owned business, that kind of investment is nearly impossible to justify when retail margins are already razor-thin.
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They weren't just fighting the internet. They were fighting the ground itself.
A History Built on "The Southern Way"
To understand why this closure hurt so much, you have to look at where they started. It all began in 1883 with a small drapery business. Over a century, the Smith family turned it into a regional powerhouse. They weren't just sellers; they were community builders.
They treated their staff like family. Some employees had been there for 30, 40, even 50 years. That kind of loyalty is basically unheard of in the modern gig economy. When the closure was announced, it affected roughly 220 staff members across their remaining locations. That is a massive hit for a city like Invercargill.
Not Just a Store, But a Social Hub
Remember the Copper Kettle? For many, the cafe inside the Invercargill store was the soul of the city. It was where deals were made, where grandparents took their grandkids for a treat, and where the local community gathered to dissect the news of the day.
When you lose a department store, you lose more than a place to buy socks. You lose a public square. The loss of H and J Smith left a literal hole in the middle of Invercargill that the city is still trying to figure out how to fill.
The Strategy Behind the Shutdown
It's easy to think the business went bankrupt. It didn't.
That’s a common misconception. H and J Smith chose to close while they were still solvent. They wanted to go out on their own terms, ensuring they could pay their staff their full redundancies and settle their debts with suppliers.
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Jason Smith was very clear about this in his public statements. He noted that the business was "no longer sustainable for the long term." By pulling the plug in 2023, they avoided a messy, involuntary liquidation that would have been far more damaging to the community and the family legacy.
They also kept some parts of the business alive. The Mitre 10 MEGA stores in Invercargill and Queenstown, along with Laser Electrical, remained under the group's ownership. They essentially pruned the dying branches to save the trunk.
What the "H&J Effect" Tells Us About the Future of NZ Retail
If a titan like H and J Smith can fall, who is safe?
The reality is that regional department stores are a vanishing species. Farmers is really the only major player left in that space in New Zealand, and even they are constantly pivoting their strategy. The lesson here is about "agile scale."
- Size is a trap: Large physical footprints are liabilities in a high-rent, high-compliance world.
- The "Everything" store is dead: People want curated experiences or pure convenience. H&J was caught in the middle.
- Heritage isn't a shield: Being 100 years old doesn't pay the power bill.
We saw similar patterns with Smith & Caughey’s in Auckland recently. They faced a similar crisis and initially announced a closure before pivoting to a smaller, "scaled-back" version of themselves. H and J Smith didn't have that luxury, largely because of the specific seismic issues with their flagship building.
Moving Forward: The Aftermath in Invercargill
So, what happens now? The Invercargill CBD is undergoing a massive transformation. With the new Invercargill Central mall opening nearby, the "center of gravity" for the city has shifted.
The H&J Smith building sits as a massive redevelopment opportunity. There is talk of mixed-use spaces—apartments, boutique offices, maybe smaller retail units. But it will never be a department store again.
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If you're a business owner or someone who cares about the South Island economy, the H and J Smith story is a cautionary tale about the importance of reinvestment and the harsh reality of building compliance.
Actionable Insights for Local Residents and Business Watchers
If you’re wondering how to navigate a post-H&J world, here is how the landscape has shifted.
First, look at the "big box" winners. The demand didn't vanish; it moved. Most of the fashion spend has migrated to Invercargill Central, while the "home" spend has consolidated into stores like Mitre 10 and Harvey Norman.
Secondly, the "buy local" sentiment has never been more critical. The closure of H and J Smith proved that even the biggest local names aren't permanent. If you value a physical storefront in your town, you have to actually spend money there.
Finally, keep an eye on the redevelopment plans for the block. The way that site is handled will dictate the economic health of Invercargill for the next twenty years. A vacant "ghost" building in the heart of the city is the biggest risk the local council currently faces.
The era of the great Southern department store is over, but the lessons of H and J Smith—on integrity, community, and the brutal reality of change—will stick around for a long time.
To stay informed on the future of the site, monitor the Invercargill City Council’s long-term plan (LTP) updates, as they will be the primary gatekeepers for how that massive CBD footprint is repurposed. Supporting the remaining independent retailers in the Tay and Esk Street areas is the best way to ensure another 120-year legacy isn't lost to the history books.