“The King is dead, long live the King,” seems to be the subtext of current reporting on the new CEO.
He left the company with only his final day’s salary, his investment diminished by $28.6million and his reputation in shatters. Yet Dick Smith former CEO Nick Abboud, has offered to remain available to provide support and advice in a non-official capacity and he will not get paid.
Meanwhile, his replacement, experienced retail leader Don Grover (pictured) is being hailed as the solution to a business that hasn’t performed adequately for almost a decade. When a company goes into receivership at such speed it is clear that it is afflicted with something far more sinister than a CEO who couldn’t do his job.
Abboud didn’t govern as a mandarin; he was accountable to the Board of Directors whom, until late 2016, were confident to sign off on Abboud’s plans. We are yet to hear if they have offered to work for free to set things right.
Readers of this news service will know that it is unlikely that any industry retailer will pick up the business. This leaves players outside the complicated CE industry to try to make a go of something that those with experience couldn’t. It’s hardly a promising scenario for Grover or the administrators.
Yesterday, Jaycar owner Gary Johnston said he would be interested in picking up around six leases for Dick Smith premises. He told the media, “we’re already in negotiations with a number of landlords. We’ve interested in the retail strips and good, freestanding site, but not the shopping centres.”
Then he made this insightful comment, “The great bulk of our customers are men, who have a deep-seated dislike of shopping centres.”
Just like the damage sustained to the Essendon AFL club by the doping scandal, the Dick Smith brand is now deeply tarnished and the business model unmanageable. It is also surrounded by competitors now soaking up its customers and owes $140million to its banks and $250 million to unsecured creditors.
Any resurrection at this stage seems fantastical.