No more Dick Smith?

[Jim Goose]

http://www.abc.net.au/news/2012-01-3...-smith/3802366

Woolworths to offload Dick Smith stores

Updated January 31, 2012 16:48:20
Dick Smith Electronics Photo: Woolworths says it has received several offers for the Dick Smith stores since November. (ABC News)
Audio: Woolworths to offload Dick Smith stores (The World Today)
Related Story: Fruit, veg prices slashed in supermarket price war
Related Story: Woolworths forced to defend pokie business
Map: Australia

Woolworths says it is planning to sell the Dick Smith electronics chain 30 years after it took full ownership of the business.

The sale will take place after a restructuring that will see almost a quarter of the electronics stores closed.

But chief executive Grant O'Brien says Woolworths will seek to find new work for employees who lose their jobs as a result of the closures.

The grocery retailer says it already has received several unsolicited offers for the company since it announced a strategic review of its consumer electronics business last November.

Dick Smith had required too much investment and management attention, Mr O'Brien said.

"We believe that separating this specialty model from Woolworths is now the best option for the future of both businesses," Mr O'Brien said.

"Business will continue as usual for Dick Smith, its customers, suppliers and staff."

While consumer electronics would remain "important" for the company, such products would best be sold through Big W stores and online, he said.

"Up to 100 underperforming stores identified for closure will be actioned in the next two years," he said.

"Affected staff will be offered redeployment elsewhere in the Woolworths group and a restructuring provision - a one-off charge of $300 million - will be taken in the first half of this financial year to cover the future store closure cost."

Dick Smith, who founded the company, believes Woolworths will struggle to find a buyer and expects it will have to find an overseas owner.
Audio: Business editor Peter Ryan on the Dick Smith sale (The World Today)

He told the PM the endless pursuit of growth for shareholders was behind the decision, not shrinking sales.

"Woolworths are making good money out of consumer electronics but there's not going to be any growth," Mr Smith said.

"And with the type of extreme capitalism and stupidity we are going on with economically in this world, trying to have growth all the time, Woolworths only want to own - or in fact any Australian public company want to own - something that's going to grow.

"They haven't yet realised it's impossible."

Woolworths took over the 44-year-old company in 1982.

Mr O'Brien made the announcement as Woolworths released overall sales figures for the first half of the financial year, reporting sales of $29.7 billion for the period, a 5 per cent rise compared with the same period a year earlier.

But food and liquor sales for comparable stores rose just 1.1 per cent in the second quarter, which was below most analysts' expectations.

Mr O'Brien said Woolworths' overall customer numbers had increased, which he attributed to lower prices and increased purchasing power.

"The first-half result was solid considering the ongoing headwinds facing the retail sector, with subdued consumer confidence and significant deflation along with the change agenda we are driving through our business," he said.

Meanwhile, fruit and vegetables have become the latest battleground in the supermarket discount war, with Woolworths' rival Coles announcing price reductions of up to 50 per cent.

Woolworths would not say whether it would match those prices yet, but a spokeswoman said it was sceptical about the size of the discounts.

[GhiaEB]

Was just listening to an interview with Dick Smith. One of the reasons he also gave as to why he beleaves Wollies is selling it, is because they are changing direction and have been for awhile. Wollies is also Australia's largest pokie machine owner. The sheer volume of pokies they own is scary.

[The Yeti]

Dick has no right to complain he sold the business unit long ago

Him wingding is like your or I complaining that the person we sold a car to changed the wheels

[b2tf]

Originally Posted by The Yeti

Dick has no right to complain he sold the business unit long ago

Him wingding is like your or I complaining that the person we sold a car to changed the wheels

I tend to agree with you.

[MITCHAY]

Originally Posted by The Yeti

Dick has no right to complain he sold the business unit long ago

Him wingding is like your or I complaining that the person we sold a car to changed the wheels

While I get what you're saying I'd think in this case you'd be less than impressed since it is your name attached to it even though you might not own it.

I barely ever go to DSE. I go to JB since there is always someone willing to help and a much better range and usually better prices.

Like has been mentioned on various media sites, what made DSE successful in the past is not what it is today.

They had a niche in the electronic components market and that was what they offered but it seems this part barely exists or doesn't at all these days.

[FGII-XR6]

I see your point but understand him not wanting his name associated with a company in foregin ownership seeing as he is so passionate about australian owned and produced

Originally Posted by The Yeti

Dick has no right to complain he sold the business unit long ago

Him wingding is like your or I complaining that the person we sold a car to changed the wheels

[The Yeti]

Originally Posted by au3xr6

I see your point but understand him not wanting his name associated with a company in foregin ownership seeing as he is so passionate about australian owned and produced

he should have considered that before he sold his name with the business unit, you cant have the cash and a say in what they do with it once youve sold it

[vztrt]

No real loss (except for people's jobs) as DSE is just a crummy version of JB HiFi now.

[superfly]

Originally Posted by vztrt

No real loss (except for people's jobs) as DSE is just a crummy version of JB HiFi now.

There's a lot of components DSE sells that JB's doesn't. I recently bought a special alarm battery from them that I couldn't find elsewhere although Jaycar probably would have had one too.

But having said that, I visit JB's waaaay more often.

[vztrt]

Originally Posted by superfly

There's a lot of components DSE sells that JB's doesn't. I recently bought a special alarm battery from them that I couldn't find elsewhere although Jaycar probably would have had one too.

Jaycar has a better range for stuff then DSE. They use to be OK but then Woolies decided to get out of that sector. I don't know why when they were making 70-90% profit on a lot of that stuff. Maybe they couldn't get the staff with actual knowledge.

[DJM83]

Originally Posted by Jim Goose

Woollies only made $2.1 or so Billion in profit.... yes.. they must be hurting

Being a manager with the company i cant tell you it aint roses. So have a think before you type.
Compare that to other big companies

Originally Posted by TheOrangeSpider

Heh, only thing I have brought from Dick Smith of lately is a game or two, they are useless now.

Jaycar has moved in with Autobarn locally, so I just go there..

Woolworths basically runs Australia, and with their constant pushes to take out contenders, most things will be run by woolies, there is something like 14,000 pokies in Australia, I believe 11,000 of them are owned by Woolworths, Local Liquor is owned by Woolworths, Dan Murphies is owned by Woolworths, surely they'll be in the car business soon selling stuff that isn't even worth looking at =\

If only you guys knew of the stuff woolies owns you would be amazed.
One thing i wish they would do is stick to selling food etc and leave the crap $2 stuff to the reject shops et al.

Dick Smith wasnt profitable, well it was but not as profitable as other divisions of the company.
Also a lot of funding of the sell off will go towards Masters hardware, along with some from other divisions.

One thing i will miss is the staff sales at DSE

[burnz]

so wollies who own's DSE who own's TANDY, so thats two company on the chopping block..

[vztrt]

Originally Posted by burnz

so wollies who own's DSE who own's TANDY, so thats two company on the chopping block..

Tandy was bought back in 2000 by wollies but they turned in to DSE stores a few years back except for the independent Tandy's.

[GreenR]

Hmm. Wonder if this means closing down sales?

[Paxton]

Dick Smith hasn't been the same since they all became powerhouses. I gave up on them completely and started patronising Jaycar, however the quality of Jaycar's components is average at best.

The Dick Smith nearest me is usually deserted, however it is on the outside of a large shopping centre. It's a shame, because the old business model was filling a niche quite nicely.

[saber]

Originally Posted by Paxton

Dick Smith hasn't been the same since they all became powerhouses. I gave up on them completely and started patronising Jaycar, however the quality of Jaycar's components is average at best.

I preferred the old style Dick Smith compared to what it is today...I tend to agree that the quality of components sold at Jaycar is average, but with no competition in the marketplace they can sell what they like...

[falconboy]

Originally Posted by Paxton

The Dick Smith nearest me is usually deserted, however it is on the outside of a large shopping centre. It's a shame, because the old business model was filling a niche quite nicely.

I assume you mean the Miranda one. Have you seen the Menai ones recently? The one in the complex with Woolies and Big W is bad enough, the one over the road near Supercheap and Dan Murphys is an absolute joke. Why they even opened one there I have no idea. Not surprising, I reckon they will be the first to shut.

[Paxton]

Originally Posted by falconboy

I assume you mean the Miranda one. Have you seen the Menai ones recently? The one in the complex with Woolies and Big W is bad enough, the one over the road near Supercheap and Dan Murphys is an absolute joke. Why they even opened one there I have no idea. Not surprising, I reckon they will be the first to shut.

Yep, Miranda Fair. Never bought anything from them. They'll go, definitely, especially once the renovations at Miranda start.

I've not been into the one at Menai (didn't know there actually was one at the Menai Marketplace), but the one next to Dan Murphy's is always deserted.

[GT0132]

Originally Posted by Paxton

Yep, Miranda Fair. Never bought anything from them. They'll go, definitely, especially once the renovations at Miranda start.

I've not been into the one at Menai (didn't know there actually was one at the Menai Marketplace), but the one next to Dan Murphy's is always deserted.

Yep agreed , I walk past there often (the Miranda store) and it's always empty. I think the last and only time I bought anything from them was when I was at Dan Murphys at Menai and happened to be walking past and needed a cord to plug ipod into AUX. That store too was empty at 11am on a Sat morning. The other store at menai marketplace, can't see why they need it...

[Hayden1]

Originally Posted by GT0132

Yep agreed , I walk past there often (the Miranda store) and it's always empty. I think the last and only time I bought anything from them was when I was at Dan Murphys at Menai and happened to be walking past and needed a cord to plug ipod into AUX. That store too was empty at 11am on a Sat morning. The other store at menai marketplace, can't see why they need it...

The one at miranda would do better if it was inside the shop! I go there (DSE not miranda) a lot looking for something specific but always end up at JB

[Geez Louise]

"Who knows how to do really bad advertising!?".....DICK DOES!

[GhiaEB]

Listening to this interview, DSE is a profitable company, the way it stands now. Dick Smith was saying that what we are going through (in Australia anyway) is hyper capitalism. It means if it's not growing faster than inflation than in the eyes of investors it's not worth investing in. Hence why Woollies is looking to sell up. Share holders are always looking for more growth than the year before.

Since the GFC, shareholders are looking for quick easy growth and can quickly change companies that don't meet their expectations and DSE isn't growing. It's not like is not turning a profit (it is) but shareholders expect more from Woollies.

[Jim Goose]

Woollies only made $2.1 or so Billion in profit.... yes.. they must be hurting

[GhiaEB]

Not woolies, DSE is who I was talking about.

[z80]

They started as electronics components suppliers, same as tandy.

Now its just cheap asian novelty gadgets and hardly any electronic components in sight.

You wouldnt buy a chip there...no static electricity protection whatsoever.

[XR6Naranja]

Heh, only thing I have brought from Dick Smith of lately is a game or two, they are useless now.

Jaycar has moved in with Autobarn locally, so I just go there..

Woolworths basically runs Australia, and with their constant pushes to take out contenders, most things will be run by woolies, there is something like 14,000 pokies in Australia, I believe 11,000 of them are owned by Woolworths, Local Liquor is owned by Woolworths, Dan Murphies is owned by Woolworths, surely they'll be in the car business soon selling stuff that isn't even worth looking at =\

[grandpa_spec_F6]

I worked for DSE after Woolies decided it was no longer an "Electronics store" but an "Electronics Retailer".

Basically, they wanted to get rid of all the electronics and components side of things such as those awesome DIY kits that actually made you THINK and be CREATIVE in place of gimmicky toys and "mainstream" electronics i.e. TV's, consoles, cameras etc.

This was because people had shifted towards places like JayCar, more or less what DSE used to be like. Furthermore, 10c components didn't make as much profit as a Laptop + extras, and usually took 5 times longer to sell as the customer would seek the advice of staff as to what components he/she required.

It was still fun to work there, but the store lost it's creative and inventive side after that, and felt like working at any other nameless retailer.

GP ruled all.

[fordman302]

couldn't agree with djm83 more, yes the company is making money but you think of that out of how many shops they have nationwide and its not a huge amount, unfortunatelly i think for DSE to get large growth back is to diversify to a company more like jb/wow etc. unfortunatelly i think woolies arent prepared to go down this track and unfortunatelly as previously mentioned they dont have the niche they once did leaving them stuck in no mans land

[hendrixhc]

I stopped going to DSE cause i got sick of hearing that they are a concept electronics store and dont deal in components anymore. AZtronics are the way to go for components and kits.

[LTDHO]

DSE used to sell the coolest kits.

Thing is, kids would rather play a game than build something.

We need to by more Aussie products.