Electronics retailer Jaycar has put up its hand to snap up current Dick Smith premises and sites, as the receivership of Dick Smith enters its second week.
In an advertisement in The Australian Financial Review yesterday, Jaycar called for Dick Smith landlords potentially concerned about the future of their tenancy to get in touch.
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Concerned landlords are urged to contact the Jaycar head office for a “confidential no-obligation discussion” about their properties.
Jaycar managing director Gary Johnston told SmartCompany this morning the ad is already working, with Jaycar receiving 15 enquires yesterday.
Johnston is specifically interested in freestanding Dick Smith sites and stores, including those in bulky good centres and on retail shopping strips, but not those in shopping centres.
Shopping centre Dick Smith stores currently account for 80 of the retailer’s 393 retail outlets.
“We don’t operate a business plan that includes shopping centres,” he says.
“We are what we like to think as a ‘destination retailer’ where shopping centre locations tend to be a little on the parasitic side,” he says.
“Dick Smith Electronics started off as a destination retail business and they still have a fairly large number of freestanding sites which may or may not be of interest of us.”
Johnston says Jaycar’s advertisement will be running twice more in AFR, which he says will give his company a “pretty good handle” on available sites in Australia and New Zealand.
The collapse of Dick Smith was not a surprise to Johnston, who had been predicting the collapse for many months.
“It certainly wasn’t wishful thinking but a very high profile business man sent me email on Friday to remind me I predicted this two years ago,” he says.
He described the Dick Smith story as a “tragedy”, particularly as he was a former employee of the chain, working alongside entrepreneur Dick Smith for seven years during the company’s rapid growth in the 1970s.
In 1981, Johnston left his role of marketing director to found Jaycar, opening the first Jaycar store in Sydney.
From that single store in Sydney, the company now has 90 stores in Australia and New Zealand and is reportedly worth more than $500 million.
Johnston was unsure of Jaycar’s exact valuation but believed the reported value to be “roughly” correct or possibly, in fact, worth more.
Johnston left just before Dick Smith was sold to Woolworths in 1982 for about $25 million.
Dick Smith was then acquired in 2012 by private equity firm Anchorage Capital for $94 million, before being floated 15 months later for an astounding $520 million valuation.
Johnston said his name was mentioned in 2012 as a potential buyer but says he “never saw any value” even at the $90 million price.
There are concerns that up to 3300 employees across almost 400 stores in Australia and New Zealand could lose their jobs if a new purchaser for Dick Smith is not found.
The first meeting of Dick Smith’s creditors will be held by receivers tomorrow.