A mainstay of the Australian tech landscape for close to 60 years, Dick Smith will be closed for good by the winter, with more than 360 stores to shutter across Australia and New Zealand, and almost 3,000 staff to call it a day.
The final chapter in the Dick Smith legacy came after a torrid few months that saw the retail group enter receivership in January off the back of weak sales results and a plunging share price. A week after receivers were appointed to find a buyer for the retail chain, the company's CEO, former Myer head honcho Nick Abboud, stepped down. Today, receivers sounded the final death knell for Dick Smith.
"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 for Ferrier Hodgson. "The offers were either significantly below liquidation values or highly conditional or both."
Without a buyer, Dick Smith's remaining chain of 301 stores in Australia and 62 stores in New Zealand (including Move branded stores, but excluding airport stores) will be closed within 8 weeks.
Eight weeks is not a long time to take more than 360 fully-stocked stores from 'up-and-running' to 'vacant premises'. So Dick Smith will be looking to get rid of its merchandise (and bring in the money to help pay out creditors and staff).
Enter the Dick Smith fire sale.
According to a letter from Ferrier Hodgson to Dick Smith staff, obtained by Business Insider, Dick Smith stores will start a "stock realisation sale" from Friday, February 26, to clear stock and manage store closures. Even store fixtures and fittings will start being sold off, though the stores won't be completely gutted until all the closures are complete.
Aside from store closures, the Dick Smith collapse will leave the retailer's legion of 'Techxperts,' including roughly 2,460 in Australia and 430 in New Zealand, facing the prospect of unemployment.
The receivers paid tribute to employees' "support and patience during the receivership process," saying that workers were expected to be paid in full before 'secured creditors'. (Secured creditors in these kinds of collapses are those with a claim to the retailer's assets, such as brands that have provided stock or shopping centre landlords).
"All Australian employee entitlements will rank as priority unsecured claims ahead of the secured creditors and are expected to be paid in full," the receivers said in a statement.
New Zealand employees who are made redundant in cases such as the Dick Smith closure are ranked ahead of secured creditors under New Zealand law, and are also "expected to be paid in full" up to a limit of NZ$22,160.
The Dick Smith of recent months was a far cry from the stalwart of Australian retail that many have come to know since the late '60s. Founded by eponymous entrepreneur and Ozemite lover Dick Smith in 1968, the company caught the eye of the Woolworths Group in the '80s, with Woollies buying a controlling stake in Dick Smith in 1981 (the same year the brand launched in New Zealand) before a full takeover in 1983. Despite its age, the company was also a pioneer in the world of e-commerce, launching online in the late '90s.
During those years the company was known as a go-to for tech enthusiasts and computer hobbyists, but a buyout from private equity firm Anchorage Capital Partners in 2012 marked a major shift for the brand.
The famous yellow and black shopfronts were joined in 2013 by more trend-focused retail stores, known as 'Move', which specialised in branded electronics, colourful accessories and "fashtronics". In the same year, Dick Smith also partnered with another retail icon, David Jones, to operate the consumer electronics sections in DJs' department stores. The Dick Smith stores themselves also put a greater focus on low-cost, white-label accessories that eschewed recognisable brands in favour of an in-house Dick Smith logo.
But the swift turnaround enacted by Anchorage was not welcomed by all, with one market analyst calling Anchorage's buyout of Dick Smith the "greatest private equity heist of all time."
Regardless of the war of words around Dick Smith's decline, its fall from grace was clear: When the company was first floated in December 2013, shares sold for AU$2.20. By the time the company announced a trading halt in January ahead of entering voluntary administration, shares stood at just AU$0.36.
As the company skated on thin ice through the start of this year, legitimate questions were raised about why the retailer wouldn't honour gift cards (many of them bought ahead of Christmas, less than a month before) and the losses that consumers faced.
But with 3,000 retail jobs axed and 363 stores to be closed for the last time, we're now facing something much more sobering: the loss of an Australian icon.
Update, March 7 at 9:45 a.m. AEDT: Receivers Ferrier Hodgson announced late on Friday that Dick Smith's Move airport stores would be closed, effective immediately. Staff from the stores, based in Sydney International Airport, are set to be moved to other Dick Smith stores for the remainder of the store network wind-down period.