Dick Smith goes into receivership

The retailer will continue to trade as receivers look for a buyer

A syndicate of lenders in retailer, Dick Smith (ASX:DSH), have made the decision to appoint receivers to the business.

James Stuart, Ryan Eagle and Jim Sarantinos from Ferrier Hodgson were appointed as receivers on January 5.

This follows the appointment of Joseph Hayes, Jason Preston, William Harris and Matthew Caddy of McGrath Nicol as voluntary administrators on January 4.

The retailer will continue to trade while the receivers undertake an assessment of the business and look for potential buyers.

Receiver, James Stuart, said it was too early to clearly identify the primary causes of the company's current financial position and the reasons for its decline, other than saying the business has become cash constrained in recent times.

Heading into the Christmas trading period, the retailer sounded a warning following a $60 million inventory write-down and conducted a 70 per cent off sale to help clear some of its excess stock.

"We are immediately calling for expressions of interest for a sale of the business as a going concern," Stewart said.

The retailer has about 3300 employees, which will continue to be paid by the receivers and Australian employee entitlements will be covered under the Fair Entitlements Guarantee (FEG) scheme if a buyer can't be found for the business.

Stewart said the New Zealand arm was profitable and expects it will be attractive to potential buyers.

Customers with outstanding Dick Smith gift vouchers won't be honoured and deposits won't be refunded.

On January 4, Dick Smith revealed it wasn't successful in obtaining support from its banking syndicate to see it through the next four to six weeks and was left with no option other than to appoint a voluntary administrator.

In a statement to the ASX, the retailer said sales and cash generation during December were below expectations and it explored alternate funding, but it wouldn't have been sufficiently timely to support its short-term funding requirements and allow it to order required inventory during the next four to six weeks.

Dick Smith runs 393 stores across A/NZ under four brands including Dick Smith, Electronics powered by Dick Smith, Move and Move by Dick Smith.

The retailer was born in 1968 as a car radio installation business based in Sydney. In 1983, Woolworths, which owned 60 per cent of Dick Smith, moved to acquire the remaining 40 per cent stake before selling the business to Anchorage Capital in 2012 for $20 million.

The retailer publicly listed on the ASX in 2013, offering shares at $2.20 each. At the time of publication, shares were trading at $0.35.



Read more: Adelaide's Intec Group goes into voluntary administration



Join the PC World newsletter!

Error: Please check your email address.

Tags Ferrier Hodgsondick smithreceivershipMcGrathNicol

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Julia Talevski
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?