Dick Smith (retailer)

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This article is about electronics retailer. For the company's founder, see Dick Smith (entrepreneur). For other uses, see Dick Smith.
Dick Smith Holdings Limited
Formerly called
 Dick Smith Electronics
Public
Traded as ASX: DSH
Industry Retail
Founded Sydney, Australia (1968 (1968))
Founder Dick Smith
Headquarters Chullora, New South Wales, Australia
Number of locations
 393[1] (2015)
Areas served
 Australia and New Zealand
Key people
Phil Cave AM (Chairman)
Products Consumer electronics
Brands
  • Dick Smith (Australia)
  • Dick Smith (New Zealand)
  • Electronics powered by Dick Smith
  • Move
Revenue Increase AU$1.319 billion[1] (2015)
Profit Increase AU$37.9 million[1] (2015)
Total assets Increase AU$508.52 million[1] (2015)
Total equity Increase AU$169.14 million[1] (2015)
Number of employees
 3,300[1] (2015)
Slogan Do More. Save More.
Website www.dicksmith.com.au (Australia)
www.dicksmith.co.nz (New Zealand)
An original Dick Smith Electronics store in Wagga Wagga, New South Wales

Dick Smith Holdings Limited (formerly Dick Smith, Dick Smith Electronics or DSE) is a major retailer of consumer electronics, founded in 1968 by Richard "Dick" Smith. The retailers' share price fell by 80% after going public on the Australian Securities Exchange (ASX) in December 2013, and in January 2016 a halt in trading was requested. On 5 January 2016 Dick Smith Holdings Limited (and associated entities) was placed into administration by its creditors.[2]

History

The business started in 1968 in a small rented premises beneath a car park in the Sydney suburb of Artarmon, New South Wales with a total capital of only AU$610. Initially, the business focused on installing and servicing car radios. In 1969, the business's success required it to move to bigger premises on the Pacific Highway in St Leonards.

Alongside the car radio business, Dick opened "Dick Smith Wholesale". The business catered to electronics hobbyists, meeting a need Smith (himself a keen hobbyist) had felt. In those days, hobbyists could only buy components from larger wholesale companies better setup for dealing with commercial customers. After touring overseas electronic stores to study modern merchandising methods, Smith introduced self-serve shopping and produced a mail-order annual catalogue with a substantial data section. To ensure almost every electronic enthusiast in Australia had one of his catalogues, it was included free in the popular electronics magazines Electronics Australia and Electronics Today International. The catalogues included ever-increasing amounts of data on electronic components, which helped make it an essential reference for anyone involved in electronics professionally or as a hobby. This catalogue is no longer being produced, the last issue being 2009.

Expansion

A Dick Smith Wizzard – a combination computer/video game console that was rebranded and sold through the stores

The company profited from the CB radio boom of the 1970s[3] and by the end of the decade had stores in all mainland states. Though many CB radio stores closed when interest waned from the early 1980s, Dick Smith Electronics survived thanks to strong sales in other areas. These included its established electronic components and kit lines, Yaesu amateur radio and Uniden-Bearcat scanners.

The company was an early retailer of brand name personal computers such as the Commodore VIC-20 and Commodore 64. It also sold own-brand models, such as the System 80 which was compatible with the Tandy TRS-80 Model I,[4] the Dick Smith Cat (an Apple II clone), the VZ-200 and VZ-300. In 1981, the Super-80 kit computer was developed as a joint venture between the company and Electronics Australia magazine.[5]

The company expanded its product range, especially during the 1970s and 1980s and stocked items such as the Heathkit electronic kits, satellite TV receiving stations, Beeple pagers and the Dick Smith Wizzard computer game. The company was an early seller of telephone equipment including answering machines, cordless and novelty phones.

Woolworths takeover

In 1980, the company had grown to 20 stores and the founder sold 60% of the company's working share to Woolworths Limited. Smith sold the balance to Woolworths in 1982 and it took full ownership of the company, having paid a total of A$25million.[6][7] The company continued to add to its network of small "main street" stores in suburbs and regional cities across Australia.

Powerhouse

The logo used for Dick Smith PowerHouse stores before the branding was discontinued in 2009

The late 1990s saw the company establish "Dick Smith Electronics Powerhouse" super-stores across the east-coast of Australia. The first PowerHouse store was opened in Bankstown, New South Wales, in 1996.[8] These were several times bigger than regular stores at approximately 2,000 square metres (22,000 sq ft) and contained departments for the main product categories and supermarket-style checkouts. The "Powerhouses", as they were known, carried a wider range of products than the smaller DSE stores, especially in the computing, audio-visual and amateur radio areas, and introduced Music to the range. Some installation services were also introduced as well as Computer repairs and upgrading.

In 2002–2003, the Powerhouse concept changed to focus on a broader consumer market and less towards electronics enthusiasts. Component ranges shrank and general electronics books ceased to be stocked. The Yaesu dealership was relinquished, ending a 27-year partnership. Electronic Kits were transferred to the smaller DSE stores and were replaced by small appliances such as kettles, coffeemakers, toasters and frypans which were removed in late 2008. In late 2007, Powerhouse stores also transferred many other small components, tools, leads and connectors continuing to distance the super-stores from the company's roots.

In 2007, Dick Smith Powerhouse stores introduced a home installation service known as "PowerSquad" to install major items such as TVs and Computer systems or to provide set-up and training on smaller items such as wireless networks and MP3 players.[9] The Powerhouse name was retired in 2009 as part of the company's re-branding. These stores are now known internally as Dick Smith "Large Format". The home installation service was relaunched in 2009 as "Mobile Techxpert Services" and again as "Clever Dick" in 2012, inline with the company's new branding.[10]

2008 rebranding

Hornsby DSE, housed inside Westfield Hornsby, was the first store to be renovated under the new concept

In early 2008, following Woolworths' review of its consumer electronics division, Dick Smith Electronics renovated its flagship store in Hornsby, New South Wales, as a "concept" under the branding "Dick Smith Technology". The store's design and product range was completely reworked incorporating a more modern feel while removing all electrical componentry and much of its tools. These products were replaced with a larger range of computers, gaming, televisions and Macintosh computers, much of which had previously been only sold in Powerhouse stores.

Inside the first Dick Smith concept store Hornsby DSE following its rebranding as Dick Smith Technology

Following further strategic review, the company decided to push forward with the new concept under the reworked "Dick Smith – Talk to the Techxperts" branding, merging all existing Dick Smith Electronics and Powerhouse stores under the same banner. In late 2008 the new Dick Smith logo (designed by Hoyne Design) and format was rolled out with many Powerhouse stores such as Macquarie Centre and Auburn being rebranded to fit the new unified company logo.[11] Powerhouse stores also cleared the majority of their small appliance lines in favour of electronic gadgets, toys and health devices with a new line of exercise equipment introduced to selected stores in early 2009. While some stores still remain semi-branded or full branded as Powerhouse, the advertising of this brand has discontinued and these stores are pending store refits to update the branding.

Newly branded Dick Smith outlet in the Sturt Mall, Wagga Wagga

As of 2012 Powerhouse style stores, now "Large Format Stores", opened in Chadstone Shopping Centre and Bendigo in Victoria, Marion, South Australia, Perth central business district, Innaloo and Rockingham in Western Australia, Hobart in Tasmania, and Stockland Rockhampton in Queensland, under new "Dick Smith – Talk to the Techxperts" branding. The new format stores had a refreshed look and logo, carried a similar range as all other Powerhouse stores minus the electrical components, plugs and sockets, with more of a focus on technology such as computers, entertainment and communications. In March 2009, Woolworths Limited CEO Michael Luscombe confirmed the end of Powerhouse as a separate entity, also adding that the company's third consumer electronics brand Tandy would gradually phase out over the next three years as the stores' leases ended. This phase left "Dick Smith" as the sole brand in the company's consumer electronics division.[12]

Acquisition by Anchorage Capital

On 31 January 2012, after nearly 30 years of ownership, Woolworths announced that after the results of a strategic review and a $300 million restructuring, it would close up to 100 Dick Smith stores and sell the business.[13] At the time, Smith, who was still involved with the company in a minor role, was concerned that the company would be sold to a foreign investor. However the company was sold to Australian investment firm Anchorage Capital Partners in September 2012, for the sum of A$94 million.[14][15][16]

In December 2013, Dick Smith was floated by Anchorage, becoming a public company.[17] At the time of the listing, the market capitalisation of the company was valued at A$520 million, less than two years after Anchorage had purchased the company for A$94 million.[18][19] Anchorage initially retained 20% of the shares in the new company, selling their stake in the company altogether in September 2014.[20]

Alliance with David Jones

From 1 October 2013, Dick Smith took over the operation of the home entertainment department in 30 David Jones retail stores in Australia and online. The venture was created by the use of a Retail Brand Management Agreement (RBMA). The RBMA allowed Dick Smith to economically extend its network of stores and operate under the banner ‘David Jones Electronics Powered by Dick Smith’. The agreement includes televisions, computers, tablets, home office, audiovisual and other digital products, but not whitegoods or small appliances, which will continue to be sold by David Jones, with employees and inventory transferred over to Dick Smith.[21] In 2014, following the first anniversary of the opening of the first store, in response to high sales, Dick Smith planned to expand the offerings available to include more high-end items such as 4K high-definition TVs and premium audio brands such as Bose.[22]

Trade Me alliance

In December 2014, Dick Smith announced the launch of the Dick Smith Trade Me store. Trade Me is a New Zealand online marketplace with over 3.5 million members. New Zealanders will now be able to purchase directly from Dick Smith through their existing Trade Me account.[23]

Financial troubles and receivership

Since listing on the ASX in December 2013, Dick Smith Holdings shares have fallen by more than 80% until a trading halt was requested.[24]

On 5 January 2016 the retailer collapsed and was placed into receivership with McGrathNicol appointed as administrator by the company's board and Ferrier Hodgson appointed by the company's major creditors National Australia Bank (NAB) and HSBC Bank Australia.[2] Some analysts and investors have suggested the future of the company is in doubt, with one telling the Sydney Morning Herald that "This could be the end of the road for Dick Smith".[6]

Ferrier Hodgson have subsequently stated that gift vouchers and deposits will not be honoured and refunds will not be issued, including for faulty products.[25] The CEO of Dick Smith Electronics Nick Abboud stepped down one week after the Company went into voluntary administration and receivership.

Private label products

Dick Smith Electronics has also long been known for its private label range of electronics which fall under the brand name "Dick Smith" (formerly called DSE, a commonly used abbreviation of Dick Smith Electronics). Although initially, in the 1980s, DSE branding focused on phones, telephony equipment and some components, the brand has since expanded into a large range of various electronic devices and components with less focus on telephony. In 2007 the DSE brand produced a wide range of products including portable DVD players, TV set-top boxes, aerials, AV receivers and amplifiers, NiCad and NiMH Rechargeable batteries as well as alkaline and lithium batteries, digital cameras, speakers, flash-memory devices, UHF radios, webcams and Ethernet, Crossover, USB, Composite AV, Component AV, 240V AC cables.[26]

A number of the DSE brand products were re-branded products from third party manufacturers and are often sold alongside their original manufacturers version of the product. An example of this is DSE's SD card range which are manufactured by ADATA and sold alongside ADATA's own SD cards in many stores. Other Dick Smith house brands were Shimasu, Digitor and Koolshades, the 1990s youth brand.

Sponsorships

Dick Smith sponsors the Melbourne Stars in the T20 Big Bash League cricket, a number of tennis tournaments including The Hopman Cup (Western Australia), The World Tennis Challenge (South Australia), The Brisbane International (Queensland) and the The Apia International (Sydney).[27]

The company also sponsors the National Rugby League nine-a-side tournament, the Auckland Nines[27] and was a support sponsor of the AFL club Richmond from 2008 until the end of 2011.[28]

Stunts

External video
video icon Dick Smith Electronics past ads

At one stage the company was promoted through its annual catalogue, wacky ads and publicity stunts. For example, Smith claimed that he would tow an iceberg from Antarctica to Sydney Harbour, cut it up into small bits and sell it for 10 cents a cube. On the morning of April 1, it appeared as if he had succeeded as hundreds of phone calls began flooding into local radio, television stations, and newspapers reporting the iceberg, most of which were from Dick Smith employees. However, he instead towed a man-made iceberg, constructed on a barge, with a big sheet of white plastic and fire-fighting foam as an April Fool's joke.[29]

Outside Australia

New Zealand

In New Zealand, Dick Smith Electronics has over 75 locations[30] including the "PowerHouse" stores, the first opening in Hamilton, then Manukau, followed by Sylvia Park in Auckland, and Palmerston North. A third brand "Dick Smith Technology" store has also opened in Lower Hutt, following the same PowerHouse product range. Its e-commerce website uses a search engine by SLI Systems that learns from what the users search for.[31] The "Talk to the Techxperts" now "Dick Does" rebranding has commenced in New Zealand, including at the Westfield Riccarton new concept store, which opened on 28 May 2009.

United States

For a period of time Dick Smith operated a small number of stores in the United States in Northern California and Los Angeles, but these were closed in 1980 and the late 1980s, respectively.

See also

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 Lua error in package.lua at line 80: module 'strict' not found.
  2. ↑ 2.0 2.1 Dick Smith fears turn true skynews.com.au, AAP. 5 January 2016, Retrieved 6 January 2015
  3. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  5. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  6. ↑ 6.0 6.1 Lua error in package.lua at line 80: module 'strict' not found.
  7. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Woolworths sells Dick Smith chain to buyout firm for $A20m - National Business Review. 27 September 2012
  16. ↑ Dick Smith’s $400m fall: how a retail icon stumbled - Crikey.com.au, 28 September 2012
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ The agony and the agony: Dick Smith's journey from private equity plaything to IPO - National Business Review, 5 January 2016
  19. ↑ Fickling, David (5 January 2016) Who Killed Dick Smith? - Bloomberg, Retrieved 5 January 2016
  20. ↑ Investments-Dick Smith Holdings Limited - Anchorage Capital, retrieved 5 January 2016
  21. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  22. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  23. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  24. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  25. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  26. ↑ Lua error in package.lua at line 80: module 'strict' not found.[dead link]
  27. ↑ 27.0 27.1 Lua error in package.lua at line 80: module 'strict' not found.
  28. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  29. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  30. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  31. ↑ Lua error in package.lua at line 80: module 'strict' not found.

External links

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