Dick Smith founder accuses group of 'destroying' business
Entrepreneur and adventurer Dick Smith has accused the private equity group that listed the Dick Smith electronics chain in a $520 million public float of "destroying" the business and putting close to 3000 staff out of work.
He said this after the chain's receivers, Ferrier Hodgson announced it was shutting down the troubled chain.
The founder of the original Dick Smith business said he had no interest in buying back the rights to the 'Dick Smith' name or any part of the troubled business.
"I haven't been involved for 30 years," he said.
* Electronics retailer Dick Smith to close all stores in Australia and New Zealand
* Dick Smith sale shoppers will have less consumer protection
* Dick Smith customers set to lose from voluntary administration appointment
* Dick Smith cuts the value of its stock
* Dick Smith backs away from profit guidance after inventory write-off
* Dick Smith NZ profit slashed in competitive market
* Dick Smith chairman Rob Murray stands by embattled CEO Nick Abboud
"When I owned Dick Smith it was a company selling electronic components. I've never been involved in consumer electronics I don't know how anyone could make any money out of it," Smith said.
"I wouldn't look at buying back the name but I'm incredibly angry about the utter dishonesty of Anchorage Capital and I hope ASIC and the Senate Inquiry do something about them," Smith said.
Anchorage bought Dick Smith from Woolworths for about $94 million in 2012, before listing it through a $520 million public float 15 months later.
Smith said the people who lost the money in the share float must have known it was unlikely to be worth $500 million.
But he said he felt for the staff.
"The staff could still be there, if they didn't have this ridiculous, never-ending growth strategy," he said.
Dick Smith's debts total about $400 million including $140 million to its banks, National Australia Bank and HSBC.
Dick Smith staff will now have to liquidate the remaining stock, which is understood to have a book value of about $200 million.
It's the second fire sale in three months for the chain, which launched a desperate pre-Christmas clearance in a bid to prop up sagging sales.
One Dick Smith worker said the sale was likely to kick off as early as Friday.
The store manager said it was an anxious time for staff even though they knew the end of was nigh.
"There was a false sense of community for a while with everyone trying to look on the bright side and then there was the news about a potential buyer from China," he said.
"But we have an update this morning, saying no more customer orders and we thought uh oh!"
"Then when we got told about a national conference call... and we knew that this was probably going to be bad news, not good."
He said the staff had been reassured that all entitlements would be paid but it would take a couple of months for all money to go through.
Ferrier Hodgson took control of Dick Smith in the first week of January.
But receivers pulled the plug on Thursday after failing to find a buyer for the troubled operation in Australia and New Zealand.
Despite a significant number of expressions of interest from local and overseas parties, the sale process had not resulted in any acceptable offers, Ferrier Hodgson said.
The 301 stores in Australia and 62 outlets in New Zealand will close within about 8 weeks, dashing the hopes of any staff hopeful that a new owner could rejuvenate the brand and save their jobs
- Sydney Morning Herald