Specialist magazine retailer Mag Nation has announced the closure of its foundation store in Auckland, but hasn’t ruled out the possibility of setting up shop elsewhere in the New Zealand city’s CBD.
Mag Nation, which operates six stores in Australia and New Zealand, including the Auckland store, was founded in 2005 by Sahil Merchant and Ravi Pathare.
The Mag Nation concept was inspired by Auckland-based Mega Mags, which was rebranded as a Mag Nation store. Now that store is set to close because it is “losing a lot of money”.
Mag Nation managing director Vali Valibhoy says the store’s lease is due to expire at the end of June. The store is located at 100 Queen Street in the Auckland CBD.
In a company blog, Mag Nation said the retail landscape in New Zealand is “a very difficult proposition”.
“Sales growth is in a slump [and] unemployment figures are almost two percentage points higher than across the Tasman,” it said.
“New Zealand is a very low-wage, high-cost economy in which imported magazines are essentially a luxury product. Our store location at 100 Queen Street hasn’t helped either.”
“It’s really in a bit of a dead zone… It doesn’t get anywhere near the same levels of passing foot traffic as it did four, five or even six years ago. Yet our rental costs have only increased.”
Mag Nation said while it has shut stores before, the closure of the Queen Street store is particularly sad because “this store was the very first cab off the rank”.
“We’re definitely investigating the possibility of opening up elsewhere in the Auckland CBD,” it said.
Valibhoy says while Mag Nation will consider opening stores in other locations as well, it is remaining “pretty cautious” in light of current conditions and the company’s internal struggles.
“When I took over a couple of years ago from the previous MD, we were still losing quite a bit of money,” Valibhoy says.
“After a lot of hard work, we are conscious of our cashflow and the general conditions.”
But Valibhoy says the Australian market isn’t nearly as dismal as the New Zealand market, insisting the company has maintained double digit year-on-year growth here.
“We found there’s no way to actually shield yourself against [the retail downturn],” he says.
“It’s retail 101 – making sure we are in keeping with our costs and, as far as venues go, trying to make sure there’s a difference between us and our competitors.”