The Business Herald’s markets and banking reporter.

Consumer NZ warning on Dick Smith online sale

Dick Smith has launched an online only, one-day sale on both sides of the Tasman today. Photo / Michael Craig
Dick Smith has launched an online only, one-day sale on both sides of the Tasman today. Photo / Michael Craig

Consumer NZ is warning shoppers to think carefully about purchasing products in a major online sale launched by Dick Smith today.

The embattled electronics seller was put into receivership by its banks last week, owing roughly A$150 million.

Receivers Ferrier Hodgson have said gift vouchers would not be honoured and deposits would not be refunded due to the financial circumstances of the company.

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"Affected customers will become unsecured creditors of the group."

Dick Smith has launched an online only, one-day sale on both sides of the Tasman today.

Deals available on the New Zealand website include an eight-inch Samsung Galaxy Tab A for $379 and a six-inch Kindle for $129.

"Given how the receivers have said they are going to deal with gift vouchers and deposits, I think it would be a bit risky to buy anything online," said Consumer NZ chief executive Sue Chetwin.

"You'd have to have an assurance from Dick Smith that the products you bought you were actually going to get."

She recommended consumers make purchases in store and collect the products immediately.

However, the discounts advertised today are not available in physical outlets.

Ferrier Hodgson has been approached for comment.

Dick Smith's website advertises a Samsung Galaxy Tab along with other electronics as part of its one-day sale.
Dick Smith's website advertises a Samsung Galaxy Tab along with other electronics as part of its one-day sale.

Dick Smith's receivership came after the retailer abandoned its profit forecast last month amid a sales slump that left the firm with high levels of excess stock, which had to be heavily discounted in the lead-up to Christmas.

Prices were slashed by up to 80 per cent in the fire sale, but it failed to have the desired effect.

Dick Smith's website advertises a Samsung Galaxy Tab along with other electronics as part of its one-day sale.
Dick Smith's website advertises a Samsung Galaxy Tab along with other electronics as part of its one-day sale.

Dick Smith chairman Rob Murray said last week that December sales had fallen below expectations.

"The company explored alternate funding, however the directors formed the view that any success in obtaining alternative funding would not have been sufficiently timely to support short-term funding requirements and allow the company to order inventory during the next four to six weeks," Murray said.

"While confident on the long-term viability of the company, the directors have been unsuccessful in obtaining the necessary support of its banking syndicate to see it through this period."

The receivers are looking to sell the retail chain, which operates 393 stores, 62 of them in New Zealand.

- NZ Herald

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