Well-known Aussie brand, Dick Smith Electronics has announced this morning that it's been placed into voluntary administration.
The business was put in a trading halt yesterday, with chairman of Dick Smith Holdings Limited, Rob Murray making the announcement to the ASX today saying: “The board believes the appointment of a voluntary administrator at this time is the best way to protect the interests of shareholders, creditors, employees, suppliers and other stakeholders.”
Dick Smith Electronics' media agency is Atomic212, after the business shifted its account from Carat in 2014. According to Nielsen, Dick Smith Electronics reported $8.1 million media spend in the 12-month period from December 2014 to November 2015.
The board has appointed McGrathNicol to act as voluntary administrator, with senior management and the board intending to work with the administrator to explore all options to allow the business to continue.
“Sales and cash generation in December were below management expectations, continuing a trend experienced during Q2 2016. The company explored alternate funding, however the directors formed the view that any success in obtaining this would not have been sufficiently timely to support short-term funding requirements and allow the company to order required inventory during the next four to six weeks,” Murray said.
“While confident on the long-term viability of the company, the directors have been unsuccessful in obtaining the necessary support of its banking syndicate to see it through this period.”
Speculation about the future of the business has been rife over the past few months, with Dick Smith Electronics holding “fire sales” in order to drive up revenue. The electronics business is completely separate from the foods business, which also holds Dick Smith's name.
Quick to comment on Dick Smith Electronics' demise, opportunist and online rival, Kogan.com, swiftly weighed in.
Founder and CEO Ruslan Kogan said: "Dick Smith has been an iconic Australian brand for decades and it's sad to see their demise. It's a sign of the changing retail landscape that has more and more Aussies turning online for the latest products at the best prices.
“It's a bittersweet situation. On the one hand, we love competition — it gets us out of bed in the morning. On the other hand, Kogan.com is proud to have played a significant part in creating more efficiency in the industry and driving down prices for shoppers, which has had a noticeable effect on many large retailers, past and present.”
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