Dick Smith for sale as receivers stop accepting gift cards and refuse to refund consumer deposits
Tuesday, January 5, 2016/
The receivers and managers of electronics chain Dick Smith are calling for urgent expressions of interest in the business.
Ferrier Hodgson partners James Stewart, Jim Sarantinos and Ryan Eagle were today appointed as receivers and managers of the company, following the appointment of McGrathNicol as voluntary administrators.
The appointment was made by a syndicate of lenders that hold security over the company.
In a statement this morning, Stewart said it will be “business as usual” for Dick Smith’s 393 retail stores in Australia and New Zealand but Dick Smith will not be honouring any outstanding gift vouchers or refunding customer deposits “due to the financial circumstances of the group”.
He said affected customers will become unsecured creditors of the company.
Stewart said it is too early to clearly identify the cause of the company’s dire financial state but said Dick Smith Holdings, which has annual sales of approximately $1.3 billion, had become “cash constrained in recent times”.
“Dick Smith is one of the best known brands associated with consumer electronics in Australia and New Zealand,” Stewart said.
“We are immediately calling for expressions of interest for a sale of the business as a going concern.”
Stewart said the New Zealand operations of Dick Smith are profitable and should be attractive to potential buyers.
Dick Smith employs 3300 people and Stewart said employees will continue to be paid by the receivers.
If the business cannot be sold as a going concern, the receivers expect employee entitlements will be covered by the federal government’s Fair Entitlements Guarantee scheme.
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