Dick Smith's receivers yesterday afternoon said they would be putting the troubled retailer to rest in the next 8 weeks.
Ferrier Hodgson yesterday announced that the remaining Dick Smith and Move stores (excluding airport locations) in Australia and New Zealand will close.
The receiver says although there were "a significant number" of local and international expressions of interest, there were no acceptable offers for the group as a whole, or for Australia or New Zealand as standalone businesses.
"The offers were either significantly below liquidation values or highly conditional or both,” says Ferrier Hodgson.
The closure of the physical stores - 301 in Australia and 62 in New Zealand - involving over 2,400 staff in Australia and approximately 430 in New Zealand will take around eight weeks.
Ferrier Hodgson says this is "a very disappointing outcome for the employees of Dick Smith who have given loyal service to the business,” and then proceeded to thank them "for their support and patience" as the receivership process was carried out.
All Australian employee entitlements rank as priority unsecured claims ahead of the secured creditors and are expected to be paid in full.
Entitlements of New Zealand employees who are made redundant are preferential claims ranking ahead of the secured creditors, and are expected to be paid in full up to a maximum statutory limit of NZD$22,160 under New Zealand law.
So, the worst predictions about the future of the 50 year-old retailer came true after all. As we said in our February issue: "informed gossip around the channel suggests none of Dick Smith’s rivals will step up and buy the brand, premises and assets."
Now that the brand's history appears to be at an end, here's a potted version to peruse:
- 1968 Dick Smith opens in Sydney as car radio business.
- 1981 Australian stores number 20.
- 1981 Woolworths buys 60% stake in DSH.
- 1981 First Dick Smith stores open in NZ.
- 1983 Woolworths buys remaining 40% stake in DSH.
- 2010-2012 Woolworths closes 73 stores.
- 2012 Woolworths sells to Anchorage Capital Partners for AU$115m.
- 2013 Anchorage Capital Partners takes DSH public, makes AU$520m at AU$2.20 per share.
- 2013 David Jones Electronics powered by Dick Smith and the first Move concept store open.
- 2013 Dick Smith Holdings has 359 stores across ANZ.
- 2014-July 2015 Shares generally remain above AU$2.00.
- August 2015 Shares dip below AU$2.00 for the first time and continue to fall.
- 2016 Dick Smith Holdings has 393 stores across ANZ over 4 brands.
- 5 January Shares suspended from ASX (having fallen to around AU$0.36) and announcement of voluntary administration, Ferrier Hodgson as Receivers and Managers.
- 12 January CEO Nick Abboud resigns, interim replacement appointed; secured creditors for the Dick Smith business are owed AU$140m and unsecured creditors approximately AU$250m; 40+ expressions of interest received.
- 14 January First Australian creditors meeting (Sydney), appointment of McGrathNicol as Administrators confirmed, extension of period before second creditors meeting flagged.
- 15 January First NZ creditors meeting (Auckland), appointment of McGrathNicol as Administrators confirmed, extension of period before second NZ creditors meeting flagged.
- 22 January All 27 David Jones concessions to close.
- 28 January Convening period of second creditors “Watershed” meetings extended, to occur on or before 9 August.
- 05 February Sydney support office operations to be restructured, culling 22 roles including the CFO; news of historical underpayment for 3,000+ Australian retail employees
- 25 February Ferrier Hodgson announces closure of all Dick Smith stores across Australia and New Zealand.