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back to article 325 Dicks sell for AUD$20m

Australian retailer Woolworths has offloaded the 325-store electronics chain Dick Smith to Anchorage Capital Partners for just AUD$20m. The retailer signalled its intention to do so earlier this year after a review of its operations decreed the electronics retailer was not core to its business or a likely source of future …

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  1. Nordrick Framelhammer
    FAIL

    They got ripped off

    Dick Smiths is worth way less than that. Their staff have no clue about technology other than what they parrot from the manufactuers printed toilet paper, they have moved from their electronic component roots and they charge like a wounded bull. I was pricing a 32Ggb microsd card and their price was four times what was being asked in computer retail stores. And that was fora DSE branded microsd, so we don't know what shitty, cheapass knockoff brand it was, versus name brand microsds from the computer retailers.

    They will soon disappear as private equity firms have a tendency to asset strip then leave the bare bones to decompose.

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    1. Sorry that handle is already taken. Silver badge
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      Re: They got ripped off

      I once overheard a DSE employee advising a customer not to buy the expensive audio cables.

      True story!

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      1. LaeMing
        Reply Icon

        Re: They got ripped off

        Yes, I have had an experience like that at a DSE too. Advised me how to get more out of my existing equipment than buy a new gadget. I guess you can get good sales people some times.

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    2. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Re: They got ripped off

      You know why we charge that much for that stuff? Because people want the big items really cheap. You know what balances out thin margins? $40 cables.

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      1. Sorry that handle is already taken. Silver badge
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        Re: AC

        With DSE's retail prices and the buying power of Woolworths it's quite difficult to believe that their margins are thin.

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  2. Thorne

    These days Tricky Dicks is exactly the same as Bing Lee only more expensive. I'm supprised they haven't gone broke already.

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  3. sam bo
    FAIL

    so they sold a business that makes a PROFIT of $20m p.a. at a loss of $400m on its value of $420m.

    So $20m x 20yrs =$400m profit against $400m loss by selling. ???

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    1. Sorry that handle is already taken. Silver badge
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      $20m profit on sales of $1.8bn is a horrible profit margin. The parent company operates at a margin about four times that. This is no doubt overly simplistic but by selling DSE they can take the money that they had to spend to make $20m with DSE and make $80m with their core business instead.

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      1. sam bo
        Reply Icon
        Go

        Any profit margin is better than a loss margin, which is what a lot of these enterprises manage to do these days.

        Why not keep it as a sideline to pay the CEO's salary package, no wait ! that won't be enough...damn.

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        1. Sorry that handle is already taken. Silver badge
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          It's also not a loss of $400m in cash, it's just a $400m write-down on what they thought the book value of the business was.

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  4. ChrisInAStrangeLand
    Facepalm

    "so they sold a business that makes a PROFIT of $20m p.a. at a loss of $400m on its value of $420m.

    So $20m x 20yrs =$400m profit against $400m loss by selling. ???"

    What Woolworths is writing down is not a cash loss, the business is and has been profitable for a decade, but an amount of "goodwill", an accounting figure that represents what they had previously told shareholders the brand is worth.

    This is normal accounting practice.

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  5. KAMiKZ
    Angel

    goddamnit

    godamnnit, you guys gotta stop using such titles, you don't know how it feels to have milk coming out of your nose!!!!

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  6. John Tserkezis

    This is a good thing.

    This gives DSE a chance to eventually flourish after being royally bollocked by Woolworths all those years.

    I'm not ignoring the other comments on this thread - they're all valid - but remember it was woolies driving the bus, at least blame the right people.

    After what woolies did, things can't *possibly* get any worse for Dickies now can they?

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    1. marky_boi
      Reply Icon
      Facepalm

      Re: This is a good thing.

      I can never see them getting back that goodwill...... Once they dumped supporting enthusiast electronics, hobbyists there was never any going back for those people, me included.

      Jaycar is my fav store now, BUT my wife has to accompany me now, so I don't buy stuff I decided I needed but her logic says I never really needed................ hmmmmmm

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  7. kiwimuso
    FAIL

    "decreed the electronics retailer was not core to its business or a likely source of future growth,"

    It probably never was, which begs the question of who was the stupid fucker that thought that buying DSE was a good idea for Woollies to invest in, then ran it into the ground by alienating all the punters who normally bought their components there.

    Ah, they're only small fry buying measly amounts of stuff. Lets get rid of all that fiddly time consuming stuff and just sell the big items - like every other department store around, only to make a decent profit we'll charge way more, and we won't have to spend money to train our staff to actually, you know, understand our products.

    Shit, what a farsighted business plan.

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  8. Anonymous Coward
    Anonymous Coward

    Anchorage & BK NZ

    Anchorage is probably using the money it got from its sale of Burger King NZ (Hungry Jacks in the West Island). Modus operandi is to buy an ailing business, make half the staff redundant, outsource the rest of them and sell within a couple of years. Bingo, profit! Meanwhile, the business ghosts along on as a shadow of its former self and is bought by someone who can read a balance sheet but doesn't realise the IP and experience has gone along with the staff.

    I look forward to seeing an expansion of Jaycar and JB Hi Fi in a few years' time.

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  9. Steven Roper

    I remember Dick Smith back in the 70s when it was actually owned by Dick Smith - general-purpose transistors 14c, resistors 5c, capacitors 10c - 90c depending on type and size, 555 timers 50c, 7400-series TTL ICs around 70c or so - all well within range of a kid's pocket money back then. I was a regular customer until I got into computers instead of electronics, around 1982/3, and my weekly trip into town to restock my components drawers was the high point of my week. Tandy Electronics was closer, but a damn sight more expensive (I remember Tandy selling resistors in 2-packs for $1.95 and 2 transistors for $2.95 - in the 70s!)

    Last time I was in a DSE was a couple of years ago, and as I recall it had degenerated to little more than a mobile phone shop that also happened to sell cameras and RC toys. A long and sad fall from the treasured electronics enthusiast store I remembered from my youth.

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  10. Winkypop Silver badge
    Thumb Up

    I still buy Dick's own products

    His peanut butter is lovely.

    http://www.dicksmithfoods.com.au/

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    1. Sorry that handle is already taken. Silver badge
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      Re: I still buy Dick's own products

      Dick Smith hasn't had any affiliation with the electronics chain that bears his name since he sold it 30 years ago.

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  11. Mayday
    Stop

    The old days...

    I remember when Dick Smith Electronics used to sell electronics. My first foray into techo stuff came at the age of about 8 when my dad bought me a Funway Electronics kit. It all just came from there.

    The chain sold today is nothing more than a poor excuse for a box shipping company where everything costs 10x what it should, with staff that really dont know very much at all.

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