Creditors and staff feel pain of management negligence.
As creditors, shareholders and staff digest the news that life as they know it for Dick Smith Holdings (DSH) is over, National Australia Bank and HSBC feel righteously angry that they will not receive a penny and are considering litigation against auditors Deloitte and former company directors.
Yesterday receivers and managers, Ferrier Hodgson said they would shut 301 stores and dismiss 2,890 staff within eight weeks as a buyer for the business could not be found.
Meanwhile, yet another sale period has arrived for Dick Smith as the receivers try to recoup as much cash as they can over the next eight weeks. The deals that went on offer today are: 15% Beats by Dr Dre headphones; 20% LG and Samsung display model clearance sale; 30% Sony and Philips headphones; Samsung Galaxy Note “our cheapest price ever” at $947; 10% selected Microsoft Lumia unlocked smartphones and 15% Navman GPS.
One of the many issues being faced by the receivers as they attempt to balance all outstanding debts are supplier agreements. These include clauses that ensure the supplier retains ownership of the inventory either until it is sold or until they receive cash settlement.
This caveat has seen major DSH suppliers Apple and Samsung suddenly stop supply to stores following the news of the company’s receivership which broke in early January. In some stores these brands amount to up to 70% of inventory leaving only B grade stock to sell. This explains the lack of customers in stores over the past few weeks, despite the opportunity of ‘discounts’.
As Ferrier Hodgson receiver, James Stewart works through these contracts he is being assisted by Hillco Industrial, an international inventory specialist.