Dick Smith, a young entrepreneur and electronics technician, opened a car radio installation business beneath a carpark in Sydney. Smith said he started the business with $610.
Interest in electronics and CB radio boom led to expansion.
More than 20 stores in Australia and during the decade expanded to NZ.
Smith completed sale to Woolworths, there was rapid expansion helped by PC boom and diversification. By late last year there were 393 stores in Australasia.
Woolworths sold Dick Smith to Anchorage Capital Partners for less than A$100 million ($106 million) which the following year launched a A$534 million public listing. Smith told the Herald Sun yesterday this was where it all went wrong.He said the market float was hasty and overvalued. "I'm angry that these greedy bankers have destroyed a business that could have kept going for a long time," he said.
Sales slowed dramatically and left the firm with excess stock in the lead-up to Christmas that had to be heavily discounted in a bid to bring in cash. Shares slumped more than 80 per cent. Competition was stiff from online competitors, as well as bricks-and-mortar players such as JB Hi-Fi. The company's net debt sat at A$41 million ($43.8 million) on June 28.
Put into administration and receivers Ferrier Hodgson appointed. The company owed roughly A$140 million to secured creditors, including HSBC and National Australia Bank, and around A$250 million to unsecured creditors. The receivers said they would consider offers for the business.
Receivers announce that all 363 Dick Smith stores will close. Receivers said there had been no acceptable offers made to buy the chain. "The offers were either significantly below liquidation values or highly conditional or both," a statement said. Nearly 3000 workers will lose their jobs - 430 of them in New Zealand.