Smith & Caughey’s has commenced further consultations with its staff over its future, which could see the department store continuing to operate with a downsized business instead of shutting down entirely.

The company is considering two options after reviewing staff feedback and integrating it with other similar ideas already under assessment by the board.

The first option is to proceed with the initial proposal to wind up all retail activities by early next year.

The second option includes a significantly downsized operation and adjusted staffing levels. The company will close its Broadway Newmarket store in February and reduce the footprint of the Queen Street store to focus on popular categories and an online offer.

The department store expects to decide on the outcome of the consultation by the end of next week.

In late May, Smith & Caughey’s started a five-week consultation process with its staff regarding the potential closure of all retail operations in Queen Street, Newmarket and online retail stores.

The country’s oldest department store has experienced a 40 per cent decline in revenue in the past five years, which resulted in significant losses, according to chairman Tony Caughey.

Caughey cited increased competition, the aftermath of the Covid pandemic, a huge drop in consumer confidence and rising cost-of-living pressures.