NZ Dick Smith stores on the chopping block as Woolworths sells the chain

By Katie Jacobsen Bartolillo  

Woolworths has confirmed it will shut up to 100 Dick Smith stores across New Zealand and Australia in a bid to prepare the flailing electronics retailer for sale.

Woolworths said it will shut fewer than five of the existing 66 Dick Smith stores in New Zealand in its pre-sale trim of the consumer electronics chain.

Woolworths spokeswoman Clare Buchanan said it had an idea of which New Zealand stores would close but could not disclose them yet.

“"I would be very surprised if they don't take a very sharp knife [to it]," said Market Analyst, Arthur Lim says of the New Zealand chain of stores.

According to Company Office records Dick Smith New Zealand’s company profits fell in the last financial year to NZ$3.6m, off the back of a 49% profit loss in the year ending June 2010.

Australia’s retail sector has fared better than New Zealand’s throughout the global economic crisis, buoyed by the Australian governments’ economic stimulus plan and country’s mining boom. Part of the stimulus plan saw all Australian residents given $1000 cash hand out, much of which was spent on electrical appliances.

In a report released last month, Australian broker CLSA suggested Dick Smith would shut half its retail sites, saying sales per store were well below that of competitors’ with just A$3.9m per store, compared to JB Hi-Fi's A$18.8m.

Lim commented that culling underperforming stores would be a logical move and increase the opportunities for sale.

“No one wants underperforming operations,” he said.

Woolworths said that they would accept unsolicited offers for the Dick Smith brand and said the closure of stores would be expected to occur over the next two years at an estimated cost of NZ$387m.

Existing retailer expected to buy 

Lim predicts existing players such as Harvey Norman, rather than new entrants, would purchase Dick Smith and add its stores to their networks.

Noel Leeming Group, which includes Bond & Bond, was an unlikely suitor, given that its owner Gresham was considering selling the business.

Noel Leeming chief executive John Journee told Fairfax the sale was reflective of the competitive sector but certain factors including the strong dollar, the popularity of smartphones and tablets and the digital TV switchover would help sales.

Following an 8% profit lift for Noel Leeming in first-half sales, and a growing market share, Journee said the rise was probably at the expense of Dick Smith and Harvey Norman.

 

 

 

 

Here is a clear example of how passion can drive a successful business in the consumer electronics industry. Roger Marbeck is totally passionate about the music business, he deserves every possible success.
Another possibility for people who are after a consumer electronics job is to consider entering the music business. There are tons of opportunities for people who have sales skills and the right attitude.

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Check out this story from the NZ Herald iPad App
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This photo is just to prove the sun shines sometimes in Nelson.

There has been one lot of rain over the last few weeks but at the moment the place is stunning.

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From: Steve <shilliar@gmail.com>
Date: 8 January 2012 8:01:57 NZDT
To: "post@seakerguru.posterous.com" <post@seakerguru.posterous.com>
Subject: CES - Launchpad for products doomed to fail?

Check out this story from the NZ Herald iPad App
http://nzh.tw/10777081


Does this not reflect where business is now heading? Is it not all to do with the Internet? Product research and viability can be easily done now online rather than spending thousands on floor space at a trade show only to find there is no demand for your product.

Online businesses have been discovering just how powerful the Internet is for research. It is very easy now to establish demand. Just find out what people are searching for and what problems they want solved. The develop the product or service that can do it.

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