By Patrick Avenell
SYDNEY, NSW: Dick Smith head office will not renew any of its reseller contracts for either of its Dick Smith or Tandy branded stores. From 1 August 2010, the 36 business owners currently reselling under these banners must cease trading off the Dick Smith or Tandy name.
In a letter sent to resellers, Dick Smith explains it made the decision as part of its long term strategy for the Dick Smith brand.
“We recently completed a strategic review and we have determined that our reseller business does not strategically align with our long-term business plan,” read the letter, which was forwarded to Current.com.au.
The letter advises resellers that they should commence a wind-down of their business 60 days before the cessation of the contract. This will involve removing all Dick Smith or Tandy signage and any other related paraphernalia identifying either of the brands. After the reseller agreement is concluded, these businesses can continue operating independently, and can even continue to sell Dick Smith products by applying to become a commercial account customer.
One reseller Current.com.au spoke to said that because his business is diversified, with a focus on consumer electronics, IT and whitegoods, he will not be as adversely affected as a number of his peers, who rely heavily on the Dick Smith business. Stores that did invest their future in continuing as a Dick Smith reseller indefinitely will be forced to either move to a new group, operate as an independent, or close.
“If we could continue the contract we would, we’re definitely keen to, but they’ve just said ‘no more’,” said one reseller.
When asked if he thought the resellers had been given a fair hearing, this reseller replied, “We haven’t been given any say, they just rang up two weeks ago and said, ‘that’s the end of it’. There was nothing in the pipeline at all.”
The biggest disappointment for this reseller is that in only November last year, he spent a small fortune rebranding his store to suit the Dick Smith creative. He thinks the main reason Dick Smith head office made this decision is because Dick Smith wants all their stores to look the same, and other resellers can’t afford this sort of cash outlay.
Dick Smith spokesperson Luke Schepen said the group will honour all existing reseller contracts, saying that it is “business as usual until those contracts expire”. He repeated the explanation given in Dick Smith’s letter to resellers that this decision was made because the reseller model does not meet the group’s strategic plan for the Dick Smith business.