Electronics retailer Dick Smith to close all stores in Australia and New Zealand
Electronics retailer Dick Smith will close all its stores in New Zealand and Australia over the next eight weeks.
The company collapsed in January owing more than $350,000 to staff in New Zealand, $135 million to secured creditors and $11m to trade creditors.
Staff had been briefed and about 430 employees in New Zealand and 2460 staff in Australia would be affected.
Dick Smith has 62 stores in New Zealand.
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Challa Challa, an employee at Dick Smith on Karangahape Rd, said staff had not been told anything about the imminent store closures.
The store manager had been on a conference call with an area manager on Thursday afternoon, he said.
Work colleagues had been worried about the store's future with some already looking for new jobs, he said.
There were no customers in store when Stuff visited and "clearing excess inventory" signs were advertised on its windows.
Jayden Hughes, sales consultant at Dick Smith Hastings, said there was uncertainty about the company's next steps.
"We're waiting on a conference call tomorrow," he said.
"The public's known more than we have internally."
Hughes said some of his four colleagues had been looking for other jobs since the company went into receivership last month.
"It's absolute crap news," said one Dick Smith employee in the Wairarapa.
He said he wasn't allowed to comment but wanted to go home and talk to a family member about his next steps.
In Upper Hutt, a staff member said employees were waiting on more information about entitlements and outstanding pay.
"The brand has been absolutely shredded to bits ... but we do have a loyal customer [base]".
He said workers and loyal customers would be upset.
He said his colleagues had been looking for work elsewhere but retail electronics was "an absolutely over-saturated market."
The store had five staff, he said, some of whom had been at the store "four or five years."
Tim Morris, of retail consultancy firm Corialis, said he was not surprised by the move. "It has been a long, obvious trainwreck".
He said it had seemed that Dick Smith had lost its way for a number of years.
Morris said retailers always needed to know who their target markets were and focus on delivering to them but Dick Smith had lost that.
"They used to be the place you went when you had two things and you needed to connect them. You had a VCR and a camera and you needed the cable to connect them.
"The guys there knew would help you. Then Dick Smith decided it wanted to sell TVs and left all that behind and tried to be something else, and the others completely smashed them."
Dick Smith had not been able to keep up with competitors JB Hi-Fi, Noel Leeming and Harvey Norman, he said.
Jaycar Electronics had picked up most of the market for techy, slightly nerdy products and services that Dick Smith had previously catered for, he said.
"The guy who started that used to work and Dick Smith and it's just gone from strength to strength. Jaycar is creaming it."
Morris said Dick Smith would not be missed. "They've just been so hopeless."
Receiver Ferrier Hodgson said in a statement on Thursday that for the past few weeks the receivers and managers had been liaising with interested parties regarding the sale of the Dick Smith and Move business in Australia and New Zealand.
"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 for the group as a whole or for Australia or New Zealand as standalone businesses."
"The offers received were either significantly below liquidation values or highly conditional, or both.
"Now that all avenues for a sale of the Dick Smith and Move business in Australia and New Zealand have been exhausted, the receivers and managers have no option but to commence a controlled closure program for the entire business excluding Move Airport stores," Ferrier Hodgson said.
That process would take eight weeks depending on stock sales.
James Stewart, one of Ferrier Hodgson's directors, said it was a "very disappointing outcome".
Secured creditors, including major banks HSBC and National Australia Bank, have staked claims of approximately A$140m (NZ$151m) while unsecured creditors including Macquarie Group are owed about A$250m.
Retail consultant Chris Wilkinson of First Retail Group said he had been saying for some time that the chain did not "have a life ahead."
"The reality is, it lost its way a long time ago, and I think that when you're selling products like electronics, the customers do need a degree of assurance and when in receivership and the issues that went around that, you're really in a position of no return."
Wilkinson said there had been a lot of talk about interested buyers but people in the consumer electronics sector were unsure there was any serious interest.
The company had moved into a "very tightly defined area where they felt that their own brand was going to be the way forward".
"They moved into things like TVs but they never quite got it right.
"They were never able to achieve critical mass in a range or an offer so for instance, they had TVs there but they never had enough to be a credible player. They never managed to excel in any category."