Dick Smith to close all stores

Receivers for electronics retailer Dick Smith have announced all the company's stores in Australia and New Zealand will close over the next eight weeks.

Some 62 stores in New Zealand are affected, involving 430 staff.

Receiver James Stewart said, “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 or for Australia or New Zealand as standalone businesses. The offers were either significantly below liquidation values or highly conditional or both.”

About 2460 staff and 301 stores in Australia are affected.

Mr Stewart said this is a disappointing outcome for the employees of Dick Smith who have given loyal service to the business.

“We would particularly like to thank the Dick Smith employees for their support and patience during the receivership process.”

The receivers said entitlements of New Zealand staff are preferential claims ranking ahead of secured creditors and staff are expected to be paid in full up to the maximum of $22,160 allowed under New Zealand law.

Staff were told of the closures today.

An NBR reporter visited the Dick Smith store in downtown Auckland city moments after the news broke. The store was still lively and the staff were friendly.

Asked if there was a notice to read about the closure, the reporter was referred to the store manager and was then asked to leave the store.

It did not appear that the staff were aware of the announcement but the store manager was on the phone at the time.

Maxine Gay, of FIRST Union, which had represented Dick Smith employees in the past, says most of the workers at Dick Smith were on commission payments.

"We had the odd member here or there but we’ve had no real presence at Dick Smith for some time, not since since Progressive sold out [in 2012].”

The ASX-listed retailer’s dire financial state was starkly revealed on January 4 when it suspended trading in its shares and called in administrators.

The company said sales over the Christmas period had been below expectations, continuing the trend of the year’s second half, and it could not get enough cash to buy more stock to continue trading.

“While confident of 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,” chairman Rob Murray said.

On January 12, the day after chief executive Nick Abboud tendered his resignation with immediate effect, receivers said Dick Smith owed secured creditors $A140m and unsecured creditors a further $A250.

Receivers said they had more than 50 expressions of interest in Dick Smith’s assets and businesses. 

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