What: The day when 144 years old Smith & Caughey announces its closure for good in 2025, it falls victim of a cyber attack.

Why it is important: Department stores need scale to operate profitably, which some markets can not provide anymore now that we live in a globalized world.

Smith & Caughey’s, a distinguished Auckland department store operational for 144 years, has announced its impending closure in early 2025, attributing the decision to a combination of adverse factors including economic downturns, the rise of shopping malls, and changes in consumer behavior. This announcement coincided with a severe cyberattack that has crippled the store’s internal computer systems, further complicating communications with staff, customers, and stakeholders. The cyberattack, described as significant, involved the encryption of server and retail operations systems, prompting an emergency response from the company.

Chairman Tony Caughey called it a "live incident" and detailed the deployment of a specialist team to mitigate the effects. Despite the cyberattack, the company's website remains operational, and physical stores will temporarily close as they manage the crisis. The decision to shut down has been influenced by a 40% revenue decline over the past five years, challenges from direct brand retailing, and reduced city center foot traffic exacerbated by remote working trends.

This dual blow of a cyberattack on the same day as the closure announcement marks a profound challenge for the iconic store, which is well-regarded for its upscale offerings and festive displays. The closure is seen as a significant cultural and economic loss for Auckland, with nearly 250 jobs at risk.

NZ Smith & Caughey 144 years old department store considers closure, and is cyberattacked