Shoppers fume as Dick Smith goes into receivership

  • Opinion
  • January 12, 2016
  • Sarah Dunn
Shoppers fume as Dick Smith goes into receivership

The Dick Smith receivership was the biggest retail news of the 2016 summer break. Was it the only news of the summer break? Certainly, it was the only story that chased me all the way to my family bach in Northland. We don’t have wi-fi, but old nature magazines are in plentiful supply.

For those who missed it, here’s a catch-up: Dick Smith and its associated entities was placed into voluntary administration and went into receivership on January 4. The receivers, Ferrier Hodgson, sought expressions of interest in sale of Dick Smith as a going concern and as of this Monday, Radio NZ reported more than 30 buyers had responded.

Founded in 1968, Dick Smith’s journey to this point has beem circuitous. It began as a car radio installation business in Sydney and entered New Zealand in 1981. From 2010 onwards, 73 stores were closed before private equity firm Anchorage Capital bought the troubled company in November 2012 from Woolworths Limited for A$115 million. Anchorage floated Dick Smith on the Australian stock market for A$520 million at the end of 2013, initially retaining 20 percent of the shares but getting out altogether in September 2014.

A blog post by an investment company, Forager Funds Management, has shot to the forefront of the public conversation around Dick Smith’s collapse after describing Anchorage Capital’s float as “the greatest private equity heist of all time”. As of today, Dick Smith’s shares were at A$0.355, down from A$2.12 at this time last year.

Back at the bach, the conversation focused not on share prices but Ferrier Hodgson’s announcement that customers’ vouchers, deposits and deliveries will not be honoured. Even though nobody present was affected by the news, the venom was flowing thick and fast – the general tone was of shock and outrage.

Assuming my oddball group of holiday companions is a fair stand-in for the general public, and excusing a bit of extrapolation, we can pull some interesting considerations for retailers from this conversation.

One: Ferrier Hodgson’s decision regarding vouchers, deposits and deliveries may have an effect on consumer perceptions of these ways of purchasing, and others like them, if comments like “I’m never buying vouchers again, you just never know!” are anything to go by. Will electronics stores’ bricks and mortar stores see a bump as consumers avoid the uncertainty of ordering items online?

Two: If Dick Smith does recover, it’ll have to work very hard to win back consumers’ hearts. The company lost PR ground even before it rolled over, inconveniencing other retailers during the pre-Christmas period by waging what the NZ Herald called “an electronics price war” as it sought to unload the excess stock which pushed it into trouble. This act of desperation didn’t go as well with consumers as might be expected as many of the most popular items, such as Apple branded goods, were not significantly discounted. The sense of frustration this elicited now seems to be dovetailing nicely with the outrage caused by failure to honour vouchers, deposits and deliveries.

The latest development, besides chief executive Nick Abboud’s resignation, is Dick Smith’s new online-only sale, which began yesterday. Consumer NZ has issued a warning to consumers about the sale through the NZ Herald, with Consumer chief executive Sue Chetwin saying she feels it would be risky for shoppers to buy anything online through Dick Smith given how the receivers plan to deal with gift vouchers and deposits.

"You'd have to have an assurance from Dick Smith that the products you bought you were actually going to get,” Chetwin says.

She recommends customers make their purchases in store and collect the goods immediately. Crane Brothers chief executive Murray Crane was blunt about the likely effect of Dick Smith's behaviour in a blog post:

"I do think it is very poor form not honouring gift cards, laybys and store credits.

"If there is any value to be retrieved from the brand surely it will be more appealing to a buyer if the goodwill is intact, destroying this for some short term pecuniary gain seems shortsighted."

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.


Military-style semi-automatics ban announced

  • News
  • March 21, 2019
  • The Register team
Military-style semi-automatics ban announced

As of 3pm on March 21, a wide range of semi-automatic weapons have been reclassified under section 74A(c) of the Arms Act as requiring an E endorsement on a firearms license. This means they can no longer be sold to those with A-category gun licenses, and their purchase now requires police approval.

Read more

Retailers gather for insights at NZ Retail and The Register's breakfast

  • News
  • March 21, 2019
  • The Register
Retailers gather for insights at NZ Retail and The Register's breakfast

NZ Retail and The Register’s sales and marketing breakfast saw dozens of Kiwi retailers come together to network, sharing tips and tricks and absorbing expert advice.

Read more

Who stole Christmas?

  • News
  • March 21, 2019
  • Kelly Withers
Who stole Christmas?

Results are starting to trickle in from Christmas 2018/2019, and for many retailers, they're a little disappointing. Paydar chief executive and co-founder Kelly Withers explores the data.

Read more

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

Concept to closet
Business coverage of New Zealand Fashion Week.
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...

Chinese businesspeople raise millions for Christchurch victims

  • News
  • March 21, 2019
  • Radio New Zealand
Chinese businesspeople raise millions for Christchurch victims

A group of visiting Chinese businesspeople have raised $2.35 million for victims of the Christchurch mass shooting.

Read more

The Retail NZ Awards: What does it take to be a winning retailer?

Take this time to shine with the upcoming Retail NZ awards, a chance to show the retail industry what makes your business stand out. No ...


Hunting & Fishing New Zealand voluntarily pulls military-style assault weapons from sale

  • News
  • March 20, 2019
  • Sarah Dunn
Hunting & Fishing New Zealand voluntarily pulls military-style assault weapons from sale

In the wake of the attack on Christchurch’s Muslim community on March 15, strong calls for changes to New Zealand’s gun last have been made. Trade Me was the first retailer to act, halting the sale of all semi-automatic weapons on its platform, and it has now been joined by Hunting & Fishing New Zealand.

Read more
Next page
Results for
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

The Register

Content marketing/advertising? Email or call 022 639 3004

View Media Kit