Dick Smith has 3300 employees and today all of them are sick with worry. Dick Smith’s suppliers could also lose their businesses. Dick Smith gift cards are now worthless and that has probably ruined Christmas presents for many families, writes Jason Murphy.
In 2012, a private equity firm called Anchorage Capital bought Dick Smith from its previous owner, Woolworths.
In November, the same year, Anchorage Capital paid Woolworths $20 million upfront for the electronics retailer and promised around $80 million later. A year later, in 2013, they floated it on the stock exchange for $520 million.
According to ABC, Dick Smith employees are expected to be given more information today about the impact of the company going into voluntary administration.
The impact is spread across Australia and New Zealand in large and small states, cities and regional areas. For instance, Dick Smith employs about 80 people in Tasmania at seven outlets.
There will also be further details on the state of the business after the receivers and administrators have a chance to go through its books and report back to creditors on Thursday next week in Sydney.
The Shop, Distributive and Allied Employees Association (SDA) general secretary Paul Griffin said jobs were secure at this point, with receivers looking to sell the company as a going concern.
“Under any circumstances like this you would have some concerns, however, as I say, we’re currently looking to set up in-depth discussions with the receiver Ferrier Hodgson,” he said.
Mr. Griffin said trade would continue for now so jobs were safe at this point.
“There’s no indication, at this point, that the business is not going to continue,” he said.
“The intent, as we understand at this point, is that they will continue to trade with the intent of having the business sold as a going concern.
“The senior management, as we understand, is still in place, the CEO is still operating on behalf of the business for the receiver.”
Dick Smith’s founder has slammed the company’s previous private equity owners for greed, as thousands of employees wait to hear their fate. The iconic electrical retailer was yesterday placed in receivership, leaving about 3,300 jobs at risk at 393 stores across the country.
The firm’s management said sales and cash generation were below expectations in the key December trading period, continuing a poor run in the later part of 2015.