Close
 

Famous brand takes a black eye

  • Opinion
  • March 16, 2016
  • Warren Head
Famous brand takes a black eye

The group was placed in administration five days into 2016, which has created the legal technicality of the rights of customers for fulfillment of gift cards and undelivered purchases. It could be determined that the creation of a gift card is the actual product delivery, but the issue is also that the purchaser cannot unlock the embedded value.

There are accusations that the private equity owners who bought DSH from famous founder Mr. Smith in 2011 for AU$115 million and flogged it off at a $520 million valuation in 2013 mismanaged inventories and stripped the group of cash pre-flotation.

The Initial public offer was later dubbed “the greatest private equity heist of all time”.

All this from a business that was one of “Australia’s most trusted and well-known brands, renowned for its knowledgeable in-store sales staff, customer service, leading range of consumer electronic brands, convenient locations and competitive prices.” Where did I read that? In the 2013 prospectus.

It said growth would come from four main initiatives: “Growing the store network, expanding our omni-channel offering, driving growth in our mobility category and expanding our private label offering.”

The company had a network of 359 stores across Australia and New Zealand and promised to generate pro-forma revenues of $1.23 billion in FY2014 because it had undergone a significant transformation. Investors found all of this a compelling reasons to part with their money.

By November 2015 with trading weak, stock piled high and a $60 million inventory writedown, only a brilliant Christmas could have stopped bank intervention.

DSH was simply outgunned by bigger rivals. I used to delight in browsing a Dick Smith store. I visited one last week that had a Receiver Sale sign on its window and a For Lease sign on the building, while there were more shoppers 50 metres away at Harvey Norman.  Some sort of industry consolidation may be on its way.

Smiths City enters Auckland

The retail and finance group Smiths City Group is moving to fill the gap in its national store network by entering the Auckland market.

Through its subsidiary Smiths City, it has entered into a conditional agreement to purchase the business and assets of Furniture City and its logistics operation, Lucky Dragon.

Auckland-based Furniture City, has two stores in the Super City, another in Whangarei and a fulfilment and distribution facility. The business also operates an online store.

Smiths will pay $5.85 million before GST and take possession on 4 April. Once Furniture City’s purchase is settled, there will 35 stores nationally in the Smiths’ portfolio.

The balance sheet can readily absorb the new debt related to the deal as the Christchurch-based group was debt-free after it sold its flagship Colombo St store in October 2015.

The October opening of a store in Taupo added 2000 square metres of retail to an existing 63,000 square metres, which showed intent of expanding in the North Island. The Auckland stores are mid-sized, at around 1500 square metres and 2000 square metres. There are some suppliers in common with Smiths and some that differ. There is a finance offer which should fit with Smiths finance base of 55,000 customers.

Smiths’ brand portfolio has consolidated from three brands to one, with the closure of Powerstore operations and the rebranding of LV Martin in Wellington to Smiths City. That brought economies of operation and consistency to national advertising.

Smiths City chief executive Roy Campbell says that with a 30-year trading history, Furniture City is a “well-trusted brand” and the stores will continue to trade on under that name.

“We have a lot to learn about the Auckland market and we will let Furniture City be Furniture City.”

He added that Smiths is conducting a logistics review and the newly acquired Auckland warehouse is a strategic purchase that helps to reposition Smith’s national supply chain.

Smiths City’s half-year operating surplus was halved to $2.55 million, compared with $4.27 million in the same half last year. Both periods’ results were affected by extraordinary items relating to the Christchurch property, as well as “one off restructuring” costs. Operating revenues dipped 2.9 percent to $106.25 million.

The company has said in its half-year review, “A new cloud based logistics platform will enable complete visibility over our supply chain, facilitating better decision making around inventory and reducing the compliance cost of managing the relationships between ourselves and our suppliers.”

The integration of the platform will be complete in March 2016. It says it will see the benefits flow from this date.

This story originally appeared in NZRetail magazine issue 742 February / March 2016

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.

 

Countdown’s top team members honoured at its annual trade show

  • News
  • September 22, 2019
  • The Register team
Countdown’s top team members honoured at its annual trade show

Tom Jones-Griffiths from Countdown Newmarket is the grocery chain’s Store Manager of the Year 2019. He was recognised among other winning team members in a ceremony at the company’s annual trade show in Rotorua.

Read more
 
 

A temporary slowdown

  • Opinion
  • September 21, 2019
  • Satish Ranchhod
A temporary slowdown

Westpac senior economist Satish Ranchhod discusses how household spending growth has slowed in early 2019.

Read more
 
 
Design

Pams Pantry: The groundbreaking convenience store shaking up rural Canterbury

Dairies have a special place in the hearts of heartland New Zealanders, but now there’s a new format in town.

 

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.

 
topics
Concept to closet
Business coverage of New Zealand Fashion Week.
Regional rollercoaster
What does retail look like in 2019 for ...
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 ...
The future is bright
We spoke with four retailers in their twenties ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
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 ...
Sisterhood
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 ...
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 ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 
News

Diamonds in a rhinestone world: How jewellers are holding fast

Pricier products from retail’s apparel segment are often described as an ‘investment purchase’, but finance professionals would disagree on most counts – except when it ...

 
 

Come and celebrate our industry with the who’s who of retail

  • News
  • September 19, 2019
  • The Register team
Come and celebrate our industry with the who’s who of retail

Our Gem Retail Hotlist is about celebrating the vitality and innovation of New Zealand’s retail sector. Get your free ticket and join our industry’s top retailers for the networking event of the year.

Read more
 

The simple excitement of inflatable advertising

  • News
  • September 17, 2019
  • Courtney Devereux
The simple excitement of inflatable advertising

Our advertising landscape continues to rotate around the growth of digital and how digital can be used to further capture the attention of viewers.Yet there is one type of adverting so simple, so primal, so no-nonsense that even in this computer run society it has survived. We’re talking here, about inflatable, or balloon, advertising.

Read more
 
Next page
Results for
Topics
Jobs
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.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}