Jump to content

Dick Smith (retailer)

Edit links
From Wikipedia, the free encyclopedia
(Redirected fromDick Smith Electronics)
This article is about the electronics retailer. For the food retailer, seeDick Smith Foods.For the company's founder, seeDick Smith (entrepreneur).For other uses, seeDick Smith.

Dick Smith Electronics Holdings Limited
Company typePublic
ASX:DSH
IndustryRetail
Founded1968
FounderDick Smith
Defunct3 May 2016
FateOnline assets and branding acquired byKogan
HeadquartersChullora,
Australia
Areas served
Australia and New Zealand
ProductsConsumer electronics
BrandsDick Smith
Dick Smith Powerhouse
Electronics powered by Dick Smith
Move
Number of employees
3,300 (2015)
Websitewww.dicksmith.au(Australia)
www.dicksmith.co.nz(New Zealand)

Dick Smith Electronics Holdings Limitedwas an Australian chain of retail stores that sold consumer electronics goods, hobbyist electronic components, and electronic project kits.[1][2]The chain expanded successfully intoNew Zealandand unsuccessfully into several other countries. The company was founded inSydneyin 1968 byDick Smithand owned by him and his wife until they sold 60% toWoolworthsin 1980, and the remaining 40% two years later.

In 2012, Dick Smith had 263 stores around Australia. It also had 62 stores around New Zealand,[3]including 20 in Auckland.[4]

The company closed all of its stores in 2016, four years after its acquisition by Anchorage Capital Partners, though the Dick Smith brand name continues as an online brand operated byKogan.

History[edit]

Early years[edit]

The business started in 1968 in a small $15-rent-per-week premises in a car park in theSydneysuburb ofNeutral Bay[5]: 96 with a total capital of only AU$610 (equivalent to A$7500 in 2018). Initially, the business focused on installing and servicingcar radios.In 1969, the business's success required it to move to bigger premises, first Atchison Street,St Leonards,later Carlotta Street,Artarmonwith flagship store nearby, on thePacific Highway,Gore Hill.

When the entire electronics business landscape was remodelled by the Whitlam government's across-the-board 25% tariff cut in 1973, for the loss of 138,000 manufacturing jobs,[6]Smith moved with the market and met the competition with a re-emphasis on imported electronic components and finished products. Alongside the car radio business, he opened "Dick Smith Wholesale". The business catered to electronics hobbyists, meeting a need Smith had felt. In those days, hobbyists could buy components only from larger wholesale companies better set up for dealing with commercial customers. After touring overseas electronic stores to study modernmerchandisingmethods, Smith introduced self-serve shopping, a breakaway from the longstanding counter-sales setup found in component sales at the time, and produced an annual mail-order catalogue with a substantial data section.[5]: 15–21 

Publicity stunts[edit]

The company promoted itself with wacky-style and Smith's own publicity stunts. For example, Smith claimed that he would tow anicebergfromAntarcticatoSydney Harbour,cut it up into small bits and sell it for 10 cents a cube. On the morning of 1 April 1978, it appeared as if he had succeeded as hundreds of phone calls reporting the iceberg began flooding into local newspapers and radio and television stations, most of which were from Dick Smith employees. The "iceberg" turned out to be a barge cloaked in white plastic sheeting and topped withfirefighting foam,anApril Fool'sjoke.[7]

Expansion[edit]

A The Dick Smith Wizzard – a combination computer/video game console that was rebranded and sold through the stores

The company profited from theCB radioboom of the 1970s[8]and by the end of the decade had stores in all mainland states. Though many CB radio stores closed when interest waned at the end of the 1970s, Dick Smith Electronics thrived on exploding PC sales and its established electronic components and kit lines.

To ensure almost every electronic enthusiast in Australia had one of his catalogues, it was included free in the popular electronics magazinesElectronics AustraliaandElectronics Today International.The catalogues included ever-increasing amounts of data on electronic components, which helped make it an essential reference for anyone involved in electronics professionally or as a hobby.

Private-branding (as "Dick Smith" or "DSE" ) was introduced on a large range of products from the late-70s.[9]Many DSE-brand products were re-branded versions of the same or similar products sold in parallel by their manufacturers.

Dick Smith Electronics own-brandSystem 80computer, which was a clone of theTandy TRS-80 Model I,[10]led a highly successful line, including the Dick Smith Cat (anApple IIclone), theVZ-200andVZ-300.The company also sold brand namepersonal computerssuch as theVIC-20andCommodore 64.In 1981, theSuper-80kit computer was developed as a joint venture between the company and Electronics Australia magazine.[11]

The company expanded its product range, especially during the 1970s and 1980s, and stocked items such as theHeathkitelectronic kits, satellite TV receiving stations, BeeplepagersandThe Dick Smith Wizzardcomputer game. The company was an early seller of telephone equipment includinganswering machines,cordlessand novelty phones.

Woolworths takeover[edit]

In 1980, the company had grown to 20 stores and the founder and his wife sold 60% of the company's shares to large general retailerWoolworths.The Smiths sold the balance of the company's capital to Woolworths in 1982, the total transfer price coming to A$25million.[12]The company continued to add to its network of small "main street" stores in suburbs and regional cities across Australia.

Powerhouse[edit]

The logo used for Dick Smith Powerhouse stores before the branding was discontinued in 2009

The late 1990s saw the company establish "Dick Smith Powerhouse" super-stores across theeast coast of Australia.The first Powerhouse store was opened inBankstownin 1996.[13]These were several times bigger than regular stores at approximately 2,000 square metres (22,000 sq ft) and contained departments for the main product categories and supermarket-style checkouts. The "Powerhouses", as they were known, carried a wider range of products than the smaller DSE stores, especially in the computing,audio-visualandamateur radioareas, and introduced Music to the range. Some installation services were also introduced as well as Computer repairs and upgrading.

In 2002 and 2003, the Powerhouse concept changed to focus on a broader consumer market and less towards electronics enthusiasts. Component ranges shrank and generalelectronicsbooks ceased to be stocked. TheYaesuamateur radio dealership was relinquished, ending a 27-year partnership. Electronic kits were transferred to the smaller DSE stores and were replaced by the short-lived appearance of small appliances such askettles,coffee makers,toastersandfrypans.A home installation service known as "PowerSquad" to install major items such as TVs and computer systems or to provide set-up and training on smaller items such aswireless networking,MP3 playersandiPodswas offered.[14]In late 2007, Powerhouse stores also transferred many other small components, tools, leads and connectors to small stores, continuing to distance the super-stores from the company's electronic enthusiast roots.

Major changes[edit]

Hornsby DSE, housed insideWestfield Hornsby,was the first store to be renovated under the new concept

In early 2008, following Woolworths' review of its consumer electronics division, Dick Smith Electronics renovated its flagship store atWestfield Hornsby,as a "concept" under the branding "Dick Smith Technology". The store's design and product range was completely reworked incorporating a more modern feel while removing all electrical componentry and much of its tools. These products were replaced with a larger range ofWindowscomputers, gaming, televisions andMaccomputers, much of which had previously been only sold in Powerhouse stores.

Inside the first Dick Smith concept store Hornsby DSE following its rebranding as Dick Smith Technology

Following further strategic review, the company decided to push forward with the new concept under the reworked "Dick Smith – Talk to the Techxperts" branding, merging all existing Dick Smith Electronics and Powerhouse stores under the same banner. In late 2008 the new Dick Smith logo and format was rolled out with many Powerhouse stores such asMacquarie CentreandAuburnbeing rebranded to fit the new unified company logo.[15]

Newly branded Dick Smith outlet in the Sturt Mall,Wagga Wagga

"Large Format Stores" opened inChadstone Shopping CentreandBendigo,Marion,Perth,Innaloo,Rockingham,HobartandStockland Rockhamptonunder new "Dick Smith – Talk to the Techxperts" branding.

In March 2009,WoolworthsCEOMichael Luscombeconfirmed the end of Powerhouse as a separate entity, also adding that the company's third consumer electronics brandTandywould be gradually phased out over the next three years as the stores' leases ended. This phase left "Dick Smith" as the sole brand in the parent company's consumer electronics division.[16]

The mail-order catalogue so central to the company's success from the early days was last published in 2009, giving way to the online sales platform.

Acquisition by Anchorage Capital[edit]

On 31 January 2012, after nearly 30 years of ownership, Woolworths announced that after the results of a strategic review and a $300 million restructuring, it would close up to 100 Dick Smith stores and sell the business.[17]The company was sold toAnchorage Capital Partnersin September 2012, for an initial cash payment of A$20 million[18][19][20]and ultimate total price of some $115 million. It has been argued that Anchorage only put up $10 million in cash, the remainder of the funds being sourced from the business itself through liquidation of inventory, plant and equipment, and taking provision for future onerous lease payments, a process described as "the greatest private equity heist of all time".[21][22]In November 2012, Nick Abboud was appointedCEO.

In December 2013, Dick Smith wasfloatedby Anchorage on theAustralian Securities Exchange(ASX), becoming apublic company.[23]At the time of the listing, the market capitalisation of the company was valued at A$520 million, less than two years after Anchorage had purchased the company for A$20 million.[24][25]Anchorage initially retained 20% of the shares in the new company but had fully divested their holdings by September 2014.[26]

Alliance with David Jones[edit]

From 1 October 2013, Dick Smith took over the operation of the home entertainment department in 30David Jonesretail stores in Australia and online. The venture traded under the banner "David Jones Electronics Powered by Dick Smith" and promoted televisions, computers, tablets, home office, audio-visual and other digital products, with employees and inventory transferred over to Dick Smith.[27]

By the second half of 2014, sales were running at A$1.4 billion per annum.[28]

Fraud[edit]

Prior to bankruptcy, management used fraudulent accounting methods to acquire A$124.89 million in loans falsely alleging it was needed to purchase stock for bo xing day sales. CFO Michael Potts was found guilty and ordered to repay $43M to NAB in June 2021.[29]Around the time of closing, it was widely considered one of the largest private-equity heists of all time, with Anchorage Capital ultimately turning $10m in to $520m in less than two years.[30](They added $10M from Dick Smith itself in order to pay the $20M purchase price). Multiple court cases and class actions resulted.[31]ASIC was accused of failing to act, and chose not to publish their post mortem investigations.[32]

Closure[edit]

A The Dick Smith Electronics store inMelbourneduring the liquidation sale

On 4 January 2016, with the value of shares in Dick Smith Holdings having fallen by more than 80% since they were listed on the ASX in December 2013, ahalt in tradingwas requested.[33]The following day, Dick Smith Holdings Limited (and associated entities) was placed intoadministrationby its major creditorsNational Australia Bank(NAB) andHSBC Bank Australia.[34]McGrathNicol were appointed asadministratorsby the company's board but receiversFerrier Hodgsonwere appointed by the creditors.[35]CEO Nick Abboud stepped down on 12 January.[36]

Having failed to secure a buyer for the stores, receivers Ferrier Hodgson announced, on 25 February 2016, that all 363 DSE stores in Australia and New Zealand would be closed, with the loss of 2,460 jobs.[37][38][39][40]

On 15 March 2016 it was revealed thatKogan,the online retailer founded byRuslan Kogan,had acquired the Dick Smith brand, trademarks, intellectual property, and its online business in Australia and New Zealand for an undisclosed price.[41]The Dick Smith brand has been transitioned to an online-only store selling a wide variety of consumer items.[42]

The last physical retail stores closed on 3 May 2016.[43]

On 25 July 2016 Dick Smith Electronics' creditors placed what was then left of the company inliquidation.[44][45]Creditors were expected to lose up to A$260 million.[46]

Though not connected with the company for 34 years, its founder Dick Smith expressed dismay at the closure and put it down to the "utter greed of modern capitalism".[47]

Outside Australia[edit]

Hong Kong[edit]

DSE's first foray offshore was the establishment Dick Smith Electronics (HK) Limited inHong Kongin 1978. It operated a small buying office and one retail store, at two locations in Ashley Road,Tsim Sha Tsui,Hong Kong. The store targeted tourists generally and Australians, in particular, looking for tax-free DSE products. An international edition of the flagship catalogue was published in support of the operation. In the face of fierce competition from established local retailers and disappointing sales, the business closed in June 1980.

New Zealand[edit]

Dick Smith Electronics registered for business in New Zealand in 1981[48]and is believed to have opened a store the same year.[49]In 1992, the company acquired and rebranded the retail business of David Reid Electronics, a similar chain that at one time consisted of about 30 stores.[50]In some cases, this meant that for a time two Dick Smith stores operated in the same suburb.

In New Zealand, Dick Smith Electronics had over 75 locations.[51]They included the "Powerhouse" stores, the first of which opened inHamilton,followed byManukauandSylvia ParkinAuckland,andPalmerston North.A third brand "Dick Smith Technology" store opened inLower Hutt,following the same Powerhouse product range. Itse-commercewebsite had been using asearch enginebySLI Systemsthat learns from what the users search for.[52]The Powerhouse brand was discontinued in 2009.

United States[edit]

From 1980, DSE operated a small number of stores in the United States, inNorthern CaliforniaandLos Angeles,but had closed by the end of the decade.[citation needed]

Sponsorships[edit]

DSE sponsored theMelbourne Starsin the T20Big Bash Leaguecricket, a number of tennis tournaments including theHopman Cup,World Tennis Challenge,Brisbane Internationaland theSydney International.[53]

The company was a sponsor of theNational Rugby Leaguenine-a-side tournament, theAuckland Nines[53]and of theAFLclubRichmondfrom 2008 until the end of 2011.[54]

See also[edit]

References[edit]

  1. ^"Dick Smith".dicksmith.au.Dick Smith Holdings. Archived fromthe originalon 25 February 2016.
  2. ^"Dick Smith".dicksmith.co.nz.Dick Smith Holdings. Archived fromthe originalon 23 February 2016.
  3. ^Hutching, Matthew (31 March 2016)."NZ Dick Smith stores start closing in April".Newshub.MediaWorks New Zealand.
  4. ^"Store Locator - Dick Smith NZ Mobile".dicksmith.co.nz.Dick Smith NZ.
  5. ^abBain, Ike (2002).The Dick Smith Way.McGraw-Hill.ISBN0074711601.
  6. ^"Leader's tariff cut blunder".The Age.1 January 2004.Retrieved5 October2018.
  7. ^"The Sydney Iceberg".The Museum of Hoaxes.Alex Boese.Retrieved12 February2015.
  8. ^"The CB Boom".OzCBRadios.Retrieved11 February2015.
  9. ^ "DSE Brand Range Search".DSE Ltd. Archived fromthe originalon 6 October 2011.Retrieved19 December2007.
  10. ^"At last a computer for those who know NOTHING about computers!"(PDF).Electronics Australia:10. March 1978. Archived fromthe original(PDF)on 4 March 2016.Retrieved11 February2015.
  11. ^"The Super 80 Computer—at last"(PDF).Electronics Australia.43(6–8). 1981. Archived fromthe original(PDF)on 4 March 2016.Retrieved11 February2015.
  12. ^Nigel Moll (September 1992)."Logbook – Lindy's legacy".Flying Magazine.119(9). Sportsman's Market, Inc.: 46.ISSN0015-4806.Retrieved11 February2015.
  13. ^Banks, Terry (4 September 1996)."Retailing Supernova: Dick Smith's new PowerHouse".ARN.IDG Communications.Retrieved11 February2015.
  14. ^Mcentee, Claire (27 April 2009)."Dick Smith to offer home tech help".Stuff.Fairfax New Zealand Limited.Retrieved11 February2015.
  15. ^Chris Thorpe (3 April 2009)."You Don't Know Dick".Brand New.UnderConsideration.Retrieved11 February2015.
  16. ^"Woolies sets deadline for Powerhouse and Tandy brands".Connected Australia. 9 March 2009.Retrieved7 April2009.
  17. ^Gannon, Genevieve (31 January 2012)."Woolworths to sell Dick Smith Electronics".Sydney Morning Herald.Retrieved9 February2015.
  18. ^Janda, Michael (27 September 2012)."Woolworths sells Dick Smith to private equity".ABC News.Retrieved9 February2015.
  19. ^Woolworths sells Dick Smith chain to buyout firm for $A20mArchived9 January 2016 at theWayback MachineNational Business Review27 September 2012
  20. ^Dick Smith’s $400m fall: how a retail icon stumbledCrikey28 September 2012
  21. ^Ryan, Matt Ryan."Dick Smith is the Greatest Private Equity Heist of All Time".Retrieved3 December2015.
  22. ^"Dick Smith blames company's previous private equity owners' 'greed' for collapse; employees wait to hear fate".ABC News.Retrieved26 February2016.
  23. ^Mason, Max (5 December 2013)."Dick Smith flat after underwhelming debut".The Age.Retrieved9 February2015.
  24. ^The agony and the agony: Dick Smith's journey from private equity plaything to IPOArchived7 January 2016 at theWayback Machine– National Business Review, 5 January 2016
  25. ^Fickling, David (5 January 2016)Who Killed Dick Smith?Bloomberg News5 January 2016
  26. ^Investments-Dick Smith Holdings LimitedAnchorage Capital, retrieved 5 January 2016
  27. ^Speedy, Blair (12 August 2013)."David Jones in electronics retail deal with Dick Smith".The Australian.News Corp Australia.Retrieved9 February2015.
  28. ^Dagge, John (17 February 2015)."Pacific Brands suffers big loss and Fortescue earnings tumble as ANZ profit machine rolls on".Herald Sun.Retrieved19 June2019.
  29. ^"Former Dick Smith CFO Michael Potts to pay $43M to NAB".16 June 2021.
  30. ^"Dick Smith is the Greatest Private Equity Heist of All Time".29 October 2015.
  31. ^"Dick Smith".
  32. ^Key mattersasic.gov.au
  33. ^Eloise Keating (4 January 2016)."Dick Smith collapses into voluntary administration".SmartCompany.au.
  34. ^"Dick Smith fears turn true".Sky News Australia.Australian News Channel Pty Ltd. 5 January 2015.Retrieved26 July2016.
  35. ^Dick Smith fears turn trueskynews.au, AAP. 5 January 2016, Retrieved 6 January 2015
  36. ^Janda, Michael Janda (12 January 2016)."Dick Smith CEO Abboud resigns, Grover to take over".Australia: ABC News.Retrieved20 January2016.
  37. ^"Dick Smith stores to close after receivers fail to find buyer; almost 3,000 jobs lost".ABC News.Retrieved26 February2016.
  38. ^"Dick Smith to close: Chain to shut down after receivers fail to win 'acceptable' offers".Herald Sun.Retrieved25 February2016.
  39. ^Tucker, Harry (30 March 2016)."All Dick Smith stores will close by April 30".Business Insider Australia.Retrieved30 March2016.
  40. ^"Ferrier Hodgson – Press Release: Dick Smith group to close".ferrierhodgson.Archived fromthe originalon 4 March 2016.Retrieved25 February2016.
  41. ^Mitchell, Sue (15 March 2016)."Dick Smith brand to be resurrected by Ruslan Kogan".Australian Financial Review.Retrieved26 March2016.
  42. ^Australia, Dicksmith."Dick Smith | The Best in Tech at Amazing Prices".Dicksmith Australia.Archived fromthe originalon 25 March 2019.Retrieved4 June2020.
  43. ^Paynter, Jack."Bargain hunters grab last minute bargains Dick Smith closes for the final time".Herald Sun.Retrieved3 May2016.
  44. ^Pash, Chris (25 July 2016)."Dick Smith creditors have put the electronics retailer into liquidation".businessinsider.au.Retrieved25 July2016.
  45. ^"NOTICE OF DEEMED SPECIAL RESOLUTION TO WIND UP A COMPANY".Insolvency Notices.Australian Securities & Investments Commission.25 July 2016.Retrieved8 December2016.
  46. ^Pash, Chris (13 July 2016)."DICK SMITH: A$260 million shortfall".businessinsider.au.Retrieved25 July2016.
  47. ^Ong, Thuy (25 February 2016)."Dick Smith stores to close after receivers fail to find buyer; almost 3,000 jobs lost".Australia: ABC News.Retrieved15 November2016.
  48. ^"DSHNZ Limited (37602) In Receivership and in Liquidation".Companies Office.2016.Retrieved2 September2016.
  49. ^"Dick Smith to be put out of its misery".wares.co.nz. 26 February 2016.Retrieved2 September2016.
  50. ^"Company History".Reid Technology. 2016.Retrieved2 September2016.
  51. ^ "Store Locations".DSE (NZ) Ltd.Retrieved24 September2013.
  52. ^Koutsonikolas, Athena (1 August 2014)."Dick Smith Reports Strong Growth Online with Enhanced Search Technology".Power Retail.The Media Pad.Retrieved12 February2015.
  53. ^ab"Sponsorships".Dick Smith Holdings.Archived fromthe originalon 9 February 2015.Retrieved9 February2015.
  54. ^Wilson, Caroline(24 February 2011)."Tigers still searching for major guernsey sponsor".The Age.Retrieved9 February2015.

External links[edit]

Wikimedia Commons has media related toDick Smith Electronics.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Dick_Smith_(retailer)&oldid=1231206702"