The Business Herald’s markets and banking reporter.

Dick Smith makes $6.8m after collapse

All of Dick Smith's bricks-and-mortar stores have now been closed. Photo / Bay of Plenty Times
All of Dick Smith's bricks-and-mortar stores have now been closed. Photo / Bay of Plenty Times

Dick Smith may have disappeared from the high streets of New Zealand and Australia, but the brand lives on and is delivering millions in revenue to its new owner.

Online retailer Kogan.com, which floated on the Australian stock exchange in July, purchased the collapsed electronics seller's intellectual property and online business for A$2.6 million ($2.7m) in March.

And it appears the acquisition wasn't a bad move.

Dick Smith has delivered A$6.5m ($6.8m) in revenue to Kogan since launching in May, helping the company beat prospectus forecasts in its full-year financial result, announced today.

The Melbourne-based company reported a net profit A$800,000 from revenue of A$211.2m.

Dick Smith collapsed in January and has now closed the more than 390 stores it operated on both sides of the Tasman.

The company's administrator, McGrathNicol, said last month that the retailer's creditors were expected to face a shortfall of more than A$260m.

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

The collapse sparked debate about the complex financial engineering used by private equity firms like Anchorage Capital, which in 2012 acquired Dick Smith for around A$100m from supermarket operator Woolworths.

Anchorage floated the retailer on the ASX the following year with a market value of more than A$500m.

Dick Smith shareholders are not expected to recoup any funds.

- NZ Herald

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