Fast Lane: The collapse of Dick Smith and the blame game
Monday, March 7, 2016/
Who is responsible for the demise of electronic retail chain Dick Smith?
According to entrepreneur Dick Smith, who founded the business in 1968 and sold it to Woolworths in the early 1980s, the blame lies with Anchorage Capital, the private equity firm that bought the company from Woolworths and made millions from its float in 2013.
But Anchorage Capital managing director Phillip Cave says his firm is not responsible for the brand’s downfall, which culminated in the business collapsing into receiverships in January.
In an interview with the Daily Telegraph, Cave said contrary to reports Anchorage Capital stripped value out of the business prior to taking it public, it had in fact made “a significant investment in staff, stores, marketing and the operating systems”.
Smith had previously written to Cave asking for an explanation for the situation that, as of last week, has resulted in hundreds of store closures, thousands of workers out of jobs and countless gift card holders short-changed.
Smith told news.com.au last week Cave has responded to his letter requested he visit Anchorage to discuss the matter further.
His response? “I’m not going to see him, he can come and see me if he wants to.”
Whether Smith and Cave will end up meeting to get to the bottom of the situation is unclear.
What is clear is members of the public and the media likely won’t know the answer to this question for some months as the voluntary administrators continue their investigation.
And in the meantime, thousands of workers are banding together in their search for new jobs.