Dick Smith Electronics gone bust

[Dave Homewood]

I see Dick Smith Electronics a familiar high street chain retail store for the past four decades or so in NZ has gone into receivership today, after losing 80% of its wealth on the stock market. Quite a surprise. I'm sure it's not good news for a lot of staff members and franchise owners around NZ.

[Peter Lewis]

To clarify, yes it is the hands of the receivers.
That situation is not necessarily terminal.
It may well trade its way back, or be sold as a going concern to another owner.

But I agree, the prognosis does not look vey good.

[Dave Homewood]

What I was reading online indicated the writing is on the wall.

[ErrolC]

www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11569422

Receiver James Stewart, of Ferrier Hodgson,
...
He said the retailer's New Zealand business was profitable and expected to be attractive to potential buyers.
...
"The board believes the appointment of a Voluntary Administrator at this time is the best way to protect the interests of shareholders, creditors, employees, suppliers and other stakeholders," {Dick Smith chairman} Murray said.
...
The stock last traded at 35.5 Australian cents on the ASX, having tumbled 84 per cent from the A$2.20-a-share Anchorage set for its initial public offering two years ago.

{buyout firm Anchorage Capital Partners} sold its remaining 20 per cent last September. Anchorage bought Dick Smith from Woolworths in 2012, in a deal reportedly valued at about A$115 million, before selling down in 2013 in an IPO that valued the company at A$520.3 million.

If you bought shares in an IPO from a buyout firm, for 4+ times what they paid less than 2 years earlier, you should have realised that you were taking more of a risk than is normal. Rough on non-shareholders impacted.

[Bruce]

I have always thought DSE lost it edge in the last few years moving away from its traditional core products of electronic and hobbyist components and gadgets to Consumer appliances (where there is serious competition). Selling resistors would never have made it a "super store" though! I find Jaycar sells more of the stuff I used to buy from DSE, so havent bought anything from them for years..
.

[atea]

I think that is exactly the problem Bruce. My Father in Law used to shop there all the time when they sold computer components but went off them all together when they stoped stocking this type of product. It has to be noted that this change occured around or after the time that the business was sold by Woolworths. Possibly a move to become less of a niche retailer and grow the brand profile before the IPO.

Moving into consumer electronics where the market place is already crowded was always going to be difficult. And to be honest I don't think they did it particularly well either. The local store here was always cluttered and the customer service was poor.

Sad that this may be the end of a well known chain that has been around for a long time.

[Dave Homewood]

I have been into many Dick Smith shops over the past ten years and I overwhelmingly found customer service was terrible whichever town or city you were in. Not like the old days when it was an electronics store and the staff were experts in their products.

[shorty]

Not refunding deposits or lay-buys or honouring gift cards is the same as theft isn't it? If I took your money and refused to give it back to you I would expect a visit from the boys in blue.

[Ian Warren]

Old 'Dickies' lost my custom years back, last product I brought from them was the XP package on its release, I personal know two techies who walked away from the shop, one started his own PC shop and I've been with him every since.

The another good friend off mine is a real whiz, he found when starting out with ole Dick he was in his element, a few things he mention about the staff, was a high turnover because of inadequate lack knowledge and a attitude problem.

[b10m]

I do not understand some of the terms used ,but this is a rundown of how Anchorage Capital Partners did the deed.
foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/

[The Red Baron]

I do not understand some of the terms used ,but this is a rundown of how Anchorage Capital Partners did the deed.
foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/

Thats how the 1980's worked,and we knighted most of the biggest corporate raiders.


Dick Smiths was probably a company that lived too long.It was oringinally set up to sell switches and valves to electronic buffs,but in these days of throw away electronics that market largely dried up and they tried to go up against the big chain discount electronic retailers which is hard work.

[No longer identifiable]

Jan 8, 2016 10:12:07 GMT 12 b10m said:

I do not understand some of the terms used ,but this is a rundown of how Anchorage Capital Partners did the deed.
foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/

Thanks for link. My neighbour works for a large consumer electronics distributor and he mentioned this analysis from Forager funds as being an excellent article on how DSE came to grief.

I walked into our local DSE just after Christmas and just as quickly walked out again - hardly any stock in sight and nothing in the home theatre range. A few days later they went under - I'm wasn't at all surprised.

[b10m]

Its been announced here that Coles will honour DickSmith Gift Cards that have been bought from them with a gift card of their own.
www.abc.net.au/news/2016-01-08/dick-smith-gift-cards-honoured-by-other-retailers/7076938