The store with no stock.
Ferrier Hodgson has confirmed that a number of potential Dick Smith buyers have been in “confidential data room undertaking due diligence” on the retailer in recent weeks as it continues to hold discussions with interested parties.
Meanwhile, it has been reported in the media that Dick Smith is “bleeding” close to $3 million a week as receivers Ferrier Hodgson negotiate the sale of the business.
The Sydney Morning Herald has reported that losses have blown out from about $2.5 million at the beginning of the year and are now closer to $3 million, as pressure builds to shut down the weakest performing outlets in the chain.
Sources told smh.com.au, that the receiver is working on paperwork for “some kind of sale” although it’s not clear whether this is for all the stores or just the top performing outlets.
It is also believed that Ferrier Hodgson is reluctant to close any stores while it’s in talks with potential buyers but sources close to the chain warn that, the longer this sale process runs, the bigger the losses are likely to be especially given the damage inflicted by the receiver’s decision not to honour Dick Smith gift cards.
One store manager said his Dick Smith store did not receive any new stock between Christmas and the last week of January.
“That’s a long time to go without stock and we have now started to get stock back but there are whispers that Apple and Microsoft are not happy with Dick Smith,” he told smh.com.au.
However, stock levels have been in decline since after Christmas 2014, according to staff, who claim a decline in deliveries of high profile brands coincided with an increase in home brand stock and accessories, despite feedback that the Dick Smith and MOVE product was not popular with shoppers.
“We were telling them to stop buying these accessories, that people weren’t buying them but they just went ahead with what they thought was a good idea,” one worker said.
“If multiple stores are telling you the same thing, maybe you should listen; we all thought they just had massive amounts of arrogance.”
The demise of Dick Smith and the role of private equity group, Anchorage Capital Partners in its transformation from a $94 million electronics business into a $520 million public company is now the subject of a Senate Inquiry, after independent South Australian senator Nick Xenophon gained bipartisan support for his inquiry into the collapse of Australian retailers last week.