After announcing the sale of Dick Smith to Anchorage Capital this morning, Woolworths Limited has confirmed its exit from the “specialty consumer electronics category” – including its joint venture operations in India.
“We announced the company’s strategic priorities in November 2011 which included a review of our portfolio of assets, particularly our participation in the consumer electronics category, with a view to maximising shareholder value,” said Woolworths CEO, Grant O’Brien.
“These businesses were a small part of Woolworths and this divestment will allow us to be fully focused on the core parts of our business.”
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Woolworths previously held an interest in the Croma brand of consumer electronics stores in India, which were jointly owned with Infiniti Retail Limited (a division of the multinational company Tata Group) and operated under the Woolworths Wholesale umbrella.
Woolworths announced a divestment of its stake in the company, to Infiniti Retail, for a total figure of AUD$35 million – significantly more than the $20 million figure it is set to receive for Dick Smith in Australia and New Zealand.
“With our decision to exit the consumer electronics specialty store sector in Australia and New Zealand, we have now decided to sell the wholesale business in India to Infiniti,” Woolworths announced. “We wish them every success with the continued development of the Croma brand in India.”
Appliance Retailer understands that Woolworths has already undertaken work to establish new infrastructure (such as new point of sale systems) at Dick Smith stores, in anticipation of today’s sale announcement.
A spokesperson for Woolworths also confirmed that the sale would not mean an exit from all consumer electronics categories across the company’s stores.
“Woolworths still has a consumer electronics offering in those other businesses [Big W and Masters], however we have announced today that we are getting out of the specialty format, and that was something that we announced we were looking to do earlier this year.
“Dick Smith is a very solid business, but we made the decision that it’s not a specialty category that we wanted to be in, it was a relatively small part of our business, and the sale frees up our management to focus on core parts of our business.”
Appliance Retailer also understands that Dick Smith’s transactional website has been sold to Anchorage with the 325 bricks and mortar stores, and while finer details of the contractual negotiations were not being discussed, it is expected that employee benefits will be retained as part of the sale.