Electronics retailer Dick Smith Group, which collapsed last month, will close its 363 stores in Australia and New Zealand after its receivers couldn't find a buyer.
"While we received a significant number of expressions of interest from local and overseas parties, unfortunately the sale process has not resulted in anyacceptable offers for the group as a whole or for Australia or New Zealand as standalone businesses," receiver James Stewart said. The stores will be closed during the next eight weeks, affecting 2890 staff, including 430 in New Zealand.
Dick Smith collapsed into receivership on January 5 owing roughly A$140 million ($150 million) to secured creditors, including HSBC and National Australia Bank, and around A$250 million to unsecured creditors.
Chris Wilkinson, of consultancy First Retail Group, said he wasn't surprised the chain was shutting down: "It just didn't have relevance with consumers any more ..."
In the wake of the collapse, receivers Ferrier Hodgson revealed Dick Smith gift vouchers wouldn't be redeemed, prompting an angry response from some consumers.
The collapse also sparked much debate about the complex financial engineering used by private equity firms like Anchorage Capital, which acquired Dick Smith for around A$100 million in 2012 from supermarket operator Woolworths and floated it on the Australian stock exchange the following year for five times that value.
Wilkinson said one of the main strategic errors made by Dick Smith was its move into low value, house-branded products.
"You need extreme volumes to actually make that stack up in expensive retail sites like downtown Auckland, for example."
Wilkinson said Dick Smith was a "unique situation" and didn't signal the impending demise of other major retail chains as a result of competitive pressure such as the rise of online shopping.
"We don't see any other [failures] waiting in the wings." NZME
