news With the exception of airport locations, all remaining Dick Smith and Move stores across Australia and New Zealand are to close, according to the receiving company Ferrier Hodgson.
The receivers anticipate that the closure of the remaining 301 stores in Australia and 62 stores in New Zealand will take approximately eight weeks to complete.
Around 2,460 staff will be affected by the store closures in Australia and approximately 430 in New Zealand.
“While we received a significant number of expressions of interest from local and overseas parties, unfortunately the sale process has not resulted in any acceptable offers for the group as a whole or for Australia or New Zealand as standalone businesses,” said James Stewart, a receiver at Ferrier Hodgson.
“The offers were either significantly below liquidation values or highly conditional or both,” he explained.
Stewart said this is a “very disappointing” outcome for the employees of the group who have given “loyal service” to the business.
“We would particularly like to thank the Dick Smith employees for their support and patience during the receivership process,” he added.
Ferrier Hodgson stressed that all Australian employee entitlements will be considered priority unsecured claims ahead of the secured creditors, and are expected to be paid in full.
Similarly, entitlements of New Zealand employees who are made redundant are preferential claims that will be ranked ahead of the secured creditors. They are expected to be paid in full up to a maximum statutory limit of NZD$22,160 under New Zealand law.
Employees across head office and stores were briefed yesterday, the firm said, and will be provided with “appropriate” outplacement support by the receivers.
Dick Smith went into receivership at the start of January, with Stewart saying at the time that it was too early to clearly identify the primary causes of the company’s decline, although he did say the business had become “cash constrained”.
Controversially, Ferrier Hodgson announced that outstanding gift vouchers would not be honoured, with affected customers becoming unsecured creditors of the group.
The situation caused independent Senator Nick Xenophon to call for urgent legislative changes to Australia’s corporations law to protect the card holders who faced losing out in the affair. He further moved for an urgent Senate inquiry into the affair.
“The Dick Smith stores collapse puts a spotlight on the role of private equity firms in takeovers where the long-term sustainability of a business is put in question by virtue of the structure of the deal that was done,” Xenophon said at the time.
In 2012, the group was sold by its then-owner Woolworths to Anchorage Capital Partners for a mere $20 million – despite reported annual sales of $1.6 billion the previous year.
Image credit: Jo Fothergill, Creative Commons
Good Riddance too, they could never compete against the big players, they should never have gone off from selling components like JayCar do. The market was already saturated with players selling big ticket items (tvs, dvd players, games consoles, etc…).
They also (at least my local store) severely lacked the knowledge of what they were selling it and they always refused to price-match against competitors.
Moving into consumer electronics and replacing all the knowledgeable staff with mindless drones sent it into a death spiral long before the private equity clowns came along to tip it off the cliff.
Someone (maybe the real Dick Smith?) should buy it up and convert the stores into hacker/makerspaces where people can play around with embedded micro devices (Raspberry Pi, wearable electronics, etc.). This is the new world of electronics kits.
Imagine being able to walk into a store with your kids and come out with their shirts covered in lightup pixels or a flashing necklace around their neck?
Even better for school holiday classes where they could spend an entire day there making all sorts of weird and crazy creations!
There was a time that Dick Smith was a great addition to Australia. I’ll be sad to see it go even though in recent years it’s been a sub-par consumer electronics store. I’ll still have fond memories of it’s electronics kits and even my first computer, the VZ300.
It’s also a a cautionary tale to anyone buying a business. It’s too easy to play games with the books and screw both the buyer and the company.
Man I miss those kits =(
I was doing some spring cleaning a while back and saw my ye olde Electronics Book + Kit no.1 Good times!
Agreed, DS (and Tandy Electronics who Woolies folded into DS) both lost their way under Woolies ownership, it seems that apart from selling grog and overpriced groceries, Woolies has no frigging clue what its doing (see Masters for additional proof).
They should have never tried turning DS and TE into box shippers and these capital clowns appear to have perpetrated a massive pump & dump fraud just to cap of the fall of Dick Smith & Tandy Electronics.
You’re right about Woollies’ sense of direction. Certainly I always thought WW were struggling with BigW and buying up DS and Tandy was a huge mistake. We know DS and Tandy had to be swallowed at the same time as the two directly complemented each other, but that was the sum total of Woollies’ expertise.
But the Anchorage Capital Partners fraud was a stellar example of Failure To Do Homework by the investors concerned, and now they are blaming everybody except themselves. This is not to say Anchorage should not be prosecuted, but don’t expect to see any recovery of the money, that’s already been put ‘way beyond reach.
Seems the receivers are dragging out the closure as long as possible, probably to increase their fees.
They are having a “fire sale” of 20% off their cheap chinese home brands.
Everyone knows you can buy the same junk from ebay for 80% off, so are boycotting this “non-sale”.
No doubt, when the receivers have bled the company dry, they will have a real fire-sale, so there is a little bit left for them to claim more fees on.
Why are all you people crying?
There is always Jaycar for all your electronic needs!
Talk about storm in a teacup…
A bit sad, but not surprising. When they ceased to cater for the electronics hobbyist, trade users etc,
like Jaycar & Altronics do now, that was the beginning of the end for me. I simply stopped going there, as they had nothing left to offer.
They also went mad, with too many stores!
Dick Smith was my very first employer too – I was one of those ’80s electronics nerds, now a professional technician. Also, kids interests have changed, it’s more computer / I.T. stuff now, and less about hardware electronics, which is all mostly designed / manufactured overseas.
Online competition has well and truly killed off the demand for these types of stores sadly, and they were never going to compete with the big box stores anyway.
Oh well, times change and things move on…
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