Jamie Gray is a business reporter for the NZ Herald

Dick Smith failure: Too soon to know why

Dick Smith operates 393 stores, 62 of them in New Zealand, and has 3300 employees. Photo / Michael Craig
Dick Smith operates 393 stores, 62 of them in New Zealand, and has 3300 employees. Photo / Michael Craig

The administrators of failed electronic goods retailer Dick Smith said it was too early provide a view on why the electronics goods retailer collapsed.

In a statement following the first meetings of creditors in Sydney, the administrators -- McGrathNicol -- said creditors resolved at the meetings to form committees.

READ MORE: Rise and fall of Dick Smith boss

"The administrators provided high-level information regarding the affairs of the Dick Smith entities, however advised that it was too early to provide a strong view on the reasons for the collapse of the Dick Smith entities or the likely return to creditors," McGrathNicol said in a statement.

A lending syndicate led by HSBC and National Australia Bank appointed receivers Ferrier Hodgson to the struggling electronics retailer early this month.

Dick Smith operates 393 stores, 62 of them in New Zealand, and has 3300 employees.

The receivership comes after the retailer abandoned its profit forecast last month amid a sales slump that left the firm with high levels of excess stock.

Dick Smith shares, which have plunged 72 per cent since the company downgraded its profit guidance in October, were suspended from trading following the appointment of administrators.

Private equity firm Anchorage paid A$94 million when it purchased Dick Smith from supermarket operator Woolworths in 2012.

The retail chain was floated on the stock market the following year with a market value of more than A$500 million, which had fallen to A$84 million by the time trading in the stock was halted.

- NZ Herald

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