Dick Smith to Close 363 Stores as Receivers Fail to Find a Buyerby
2,890 staff at iconic electronics retailer to lose their jobs
Iconic firm founded in 1968 entered administration in January
Dick Smith Holdings Ltd., the electronics retailer whose black and yellow storefronts are a feature in malls across Australia, will close most of its outlets after receivers failed to find a buyer.
Its 301 stores in Australia and 62 in New Zealand will be shuttered over the next two months and some 2,890 staff will lose their jobs, insolvency specialist Ferrier Hodgson said in an e-mailed statement Thursday. Stores located in airports will remain open.
“While we received a significant number of expressions of interest from local and overseas parties, unfortunately the sale process has not resulted in any acceptable offers,” Receiver James Stewart said in the statement. “The offers were either significantly below liquidation values or highly conditional or both.”
Dick Smith entered administration in January, just two years after a private equity-led listing valued it at A$534 million ($383 million), after months of product promotions failed to revive earnings and lenders withdrew their support.
Shares in the iconic business, which was founded in 1968 as a car-radio installation firm, were sold to the public by Anchorage Capital Partners in December 2013 for A$2.20 apiece in an initial public offering managed by Goldman Sachs Group Inc. and Macquarie Group Ltd. Its shares closed on Dec. 31 at 35.5 Australian cents.
The company’s chief executive officer, Nick Abboud, stepped down a week after it went into receivership owing at least A$390 million. The collapse has sparked public recriminations, partly because the company has refused to honor gift cards sold in the prior weeks and investors were given little warning by management that it was in peril.