Comment by Patrick Avenell

In 10 days time, a large proportion of the Australian consumer electronics industry will descend on Hong Kong for its autumn electronics trade fair.

Among the suppliers looking to pick a sourcing deal on the latest gadgets will be representatives of the retail groups, each looking to pick up the cheapest possible TVs and docking stations for their various trade brands.

In the past, Woolworths has been particularly aggressive at these shows, with industry insiders saying employees on the Dick Smith brand have been noticeable in their efforts to get the best possible deals on products for its DSE brand.

The new owners of Dick Smith, Anchorage Capital Partners, have confirmed to that they have assumed all the sourcing agreements for Dick Smith’s house brands as part of this acquisition.

That’s an important detail, as Dick Smith currently sells over 650 home brand SKUs through its stores and websites. And Dick Smith certainly does sell a lot of its cut-price home brand, according to new CEO Nick Abboud.

“It’s about 13-14 per cent of sales and there’s a big opportunity still in that space,” he told

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What Abboud couldn’t confirm, however, was whether great quality controls would be placed on the products brought in from China to carry the DSE brand.

In his defence, he’s only been in the job one week, but if house brands are going to be such a huge proportion of sales — and they are expected to grow under the new ownership — it is a matter that needs addressing.

Woolworths has an absolutely appalling record with its house brands, especially those sourced for its supermarket and mass channel stores. Dick Smith has itself been called out by the ACCC, issuing a recall in late July 2012 for a DSE-branded DVD player with the potential to overheat, presenting “a fire hazard”.

Go back to 2005, and Dick Smith had to recall a set of AC Adaptors due to the risk of “electric shock”.

Abbood told that he wants his suppliers to “get very excited” about his new team running Dick Smith. Some of these suppliers have told me how much they fear the ever growing range of house brands at retailers such as Dick Smith and JB Hi-Fi.

Not only do the retailers push these brands onto consumers at the expense of the name brands, there is a growing feeling among suppliers that the quality of these products is getting worse, not better. This view is supported by the sheer number of recalls retailers have had to enact on their house brands.

If Dick Smith is going to persist with being both a supplier and a retailer, it needs to make sure its DSE products are up to standard.