Woolies To Sell Off Dick Smith, Close Up To 100 Stores [Updated]

If you're a fan of bricks and mortar electronic retailing, it looks like your shopping choices are about to get a bit more limited. Woolworths (owners of, amongst other things, the Dick Smith Electronics chain) has announced the results of a review into its consumer electronics business. The verdict: Dick Smith Electronics has got to go. Specifically, the report notes that "the investment and management attention given to Dick Smith have been disproportionate relative to its position within the Woolworths group" and that "the future of the Dick Smith business, which is profitable, experiencing positive sales growth and has a strong brand position, could be better realised through new ownership."

So, in other words, it's looking for a buyer. But not for all the Dick Smith stores; the report also notes:

In order to maximise value and best position the business for divestment, Woolworths will implement a number of business improvement initiatives identified by the strategic review, including accelerating the rationalisation of the store network, with up to 100 underperforming stores identified for closure within the next two years. Affected staff will be offered redeployment elsewhere in the Woolworths group.

Woolworths isn't abandoning consumer electronics per se; it's more interested in focusing its efforts around Big W stores, according to the report.

Update: CRN quotes Dick Smith (who, it should be noted, hasn't had anything to do with Dick Smith Electronics for a good long time) on the sale as follows:

It’s all so predictable, I’m amazed that Dick Smith has been able to operate profitably for so long. Woolworths has made an absolute profit out of it, but the time has come for that type of business. If I’d still owned Dick Smith, I would have moved the whole operation to Hong Kong, still employed Australian staff and couriers, but everything would be sold by mail.

[Woolworths] [CRN]


Comments

    Oh no! Now I'll have to go to Harvey Norman to overpay for my electronics!

      But at least you get the same lack of product knowledge...credit where it's due..

        Most Dick Smith stores don't have departments, you try knowing everything about all the products.

        Don't forget that underlying tone of superiority and condescension you receive for actually asking a question. I'll miss that.

      I've found Retravision are a much better source of Product Knowledge, and at least I get served in there.

        Wait, you mean Retravision still exists? Huh, how about that.

          Get all my electrical from there now after much disappointment from Hardly Normal. Don't know about your area, but they are in most main towns around these parts(Country VIC)

          There's one that I know of in WA, in O'Connor. Last time I went in there I was sorely disappointed in their range of stock. That's the problem with franchises.

            You know if you check the ABN on a receipt or invoice or fact sheet at any and all DSE stores, none are franchised and haven't been for almost 8 years. Also check the difference between your local shopping centre Dick Smith and for example, the Innaloo or Perth CBD Large format stores, huge amounts of varying stock. Most of the shopping centre or occasional stand alone are just small or medium format stores as their internally known. They don't carry the full DSE range as there isn't enough space.

          Retravision just had a major merger at the end of last year, they are now one of Australia's biggest electrical retailers.

          Below is a quote from Current.com
          "With a national network of 289 stores, Retravision will now have increased buying power to rival some of the larger alliances such as Narta and the Derni Group (which comprises Harvey Norman, Domayne and Joyce Mayne)."

          Here is the full article link http://www.current.com.au/2011/12/23/article/BREAKING-NEWS-Retravision-Southern-Northern--Western-merger-confirmed/QESBDMETUB.html

        Agreed. My local Retravision is now my first stop when shopping for stuff that they stock. I stop in, talk to somebody who usually knows what they are talking about, ask their best price, then shop around.

        Harvey Norman will usually tell me that they can't match RV price because it's lower than they pay wholesale. I keep trying them because it amuses me. Dick Smith, well IF you can get somebody to talk to you, they haven't a clue and don't move much on price. JB will often match RV's price, but don't always stock the same products. And I haven't found them to be any good with the extras thay you might buy - I guess that's where they make their money.

        So then I go back to RV, to support a local franchisee, and they'll often throw in a couple of extras or heavily discount them. Bonus!

    Maybe Dick Smith can start selling components and kits again. Heck, they should start selling Arduino stuff. I can only hope.

      +1

      I went in there a couple of weeks ago to buy Electrical Tape (a very basic item) and they couldn't help me at all. Crazy! The only thing I buy there these days are more Eneloop batteries (and that's only because it's convenient for me to go there).

        Why would dicksmith have electrical tape? Try bunnings dude... that is hardware store or electrician supply store item. Dick smith sells electrical goods, not goods for electricians (except in areas where it overlaps a little)

          Historically dick smith did sell these items. Spools of cable, hundreds of little parts bins filled with switches, lights and all kinds of little doo-dads and widgets. I think what Ogre and SamD were getting at is how far they have gone from this business if they dont even sell electrical tape which is something that as you stated, even bunnings sell.

          It is not surprise how much Jaycar has expanded over the last 5 years when you consider how much of this market dick smith neglected in favour of out of date laptops and GPS units. Interestingly Jaycar are now selling arduino and a few other related bits

            This. I remember going to Dick Smith to get parts to finish Engineering projects at uni... for my hobby stuff I just go to Jaycar now because I know they will have what I am looking for.

              Even going back only a few years I was able to get electrical bits from the Brisbane store. But yeah, they definitely left that market.

            Unfortunately, Jaycar isn't anywhere near as common to find.

            Seriously? Jaycar are going the same "Tandy/Dick Smith" route.

            "gadget shops"

            It's really sad when the wanker behind the counter at a place like A-Zelectronics starts laughing about the the "end coming for home constructors" because of SMT!

    If DSE gets bought by Wesfarmers/Coles, they'd be unbeatable, technology wise... lol

    That is very sad. So I assume Tandy will go too. I really hope I can still find somewhere to buy 'bits and bobs' from.

      Tandy no longer exist, they all got re-branded, and most of those store are being shut down as they don't make enough to cover the rent

    You could have been like Jaycar Dick Smith but you sold out and tried to compete in a market where you had no idea where you really fit... It's now owned by JB and others...

      Well said... I was after some basic electronics gear for some stuff I was tinkering with and was shocked I couldn't find any of it there... DSE now just looks like all the other computer/electronic stores... I ended up going to Jaycar, at least they know their target audience...

    I haven't bought electronic parts from Dickies for years! They don't have the same range of bit and bobs and what they do keep must be made of gold. I can get most things I need through eBay or whom ever delivered to my door for less than they sell for!

    Yeah Woolies is crapping themselves over Coles at the moment. Too busy following the competition instead of leading and too many dumb shits in charge up top.

    Financial accountants, and Management Consultants really do lack a relationship with reality.

    "If I’d still owned Dick Smith, I would have moved the whole operation to Hong Kong, still employed Australian staff and couriers, but everything would be sold by mail."

    For such a (supposedly) staunch supporter of Australian business, wouldn't that be somewhat hypocritical? How many Australian staff would move to Hong Kong for continued employment given the 'entire operation' would move over there? Would he set up his own courier service or just use distribution options already in place? What about the job losses in not having a physical presence?

    I concur with the general sentiment here though - I've only been into DSE a handful of times in the last few years as there are much better alternatives (WWW).

    Anyway, I feel for the staff who will be out of a job due to this.

      Whatever man.. he aint even the owner anymore.. he's just being honest and forthright about the situation.. and he is very correct in his statement.. it has taken HN way too long to jump on the online bandwagon and JB is still lagging, though getting better..

      The way forward for pretty much all consumer electronics retail is online.. like it or not.. that's just the way it is... things are going to change no matter what you do.. Dicky knows this and from his comment it suggests he's known it for a long time too.. he totally owned the industry back in the day and had he still been the owner, I reckon he would have owned the online market place in this space as well.

        I said nothing of his degree of involvement with DSE and the announcement to close stores. I am not suggesting that he is not entitled to an opinion and the freedom to express it. I am also not disputing the 'wisdom' in proposing to move operations offshore as it would have been a relatively sound business decision.

        What I am specifically challenging and highlighting is the hypocrisy evident in his statement. You can't say you're supporting AU business and encourage others do the same - then source your stock internationally at a reduced cost, offshore your staff and cut jobs yet still suggest that it's in the best interests of Australia if people support your 'Australian' business. Gerry Harvey essentially threw a childish tantrum when Australians figured out it was potentially cheaper to cut out the middle man and get their products internationally themselves rather than let him do it and charge us a 'convenience' (greed) mark up.

        Again, the biggest issue here is the impact to the people who will be out of jobs as a result of this decision by Woolworths/DSE and I sympathise for what will be a challenging and stressful time for them.

          That caught my eye eye too, and I agree. It seems contrary to his "helping Australia" claims of the past. Almost every time a company begins to go global he is on ACA ranting about jobs being lost. Sure, he said above he'd hire Australians but obviously the idea is to reduce the manpower by quite a large magnitude by going online only.

        "The way forward for pretty much all consumer electronics retail is online." Really? How do you compare the picture and sound quality of 40 different TVs on-line? Take some idiot's word for it? No thanks, I'd much rather make my own decisions on those kinds of things. There are a lot of other things I'll happily buy on-line but for anything like a TV or hi-fi, bricks and mortar will always win.

      My thoughts exactly. I have seen him on numerous current affair programs spruiking his message about buying his Australian owned and manufactured goods because its good for the country and thats what he is all about and then he says something like this. Seems like he is just using the "Australian Owned and Manufactured" slogan to make more money.

    EB should buy them. It's the best way to make them competitive with JB, to be able to add higher margin consumer electronics to the game stores.

    Bit of a Bummer - DSE was one of the only Electronics places that did Lay-Buy

    I have to agree with JezzK - Dick Smith, what an absolute joke. He is on Today/Tonight and ACA every week complaining about things moving out of Australia and then he comes out with this. Ridiculous.

    It's always been JB Hi-Fi for me anyway. Their range is better, their staff are more knowledgeable and they much more competitive on price then Harveys, Dick Smith and Good Guys.

    As for EB buying them, their margins are too big to be competitive with JB on games software as it is, I doubt they would be willing to cut down their price on hardware.

    Time for Kogan to buy up and open a couple of boutique stores.

    Interesting - profitable, but not brutally profitable enough to be part of woolies. Given that coles own HarrisTech I would think they will be next to go on the other side of this charming little duoply war that the ACCC thinks is "competition" but which actually represents the end of real competition:-)

    I remember in the early 80's going into Dick Smith and finding any type of electronic component I need. Now I go into Dick Smith and is met by a 13 year old kid who has no idea what anything is nor has any customer services skills . I won't be sad to see them go.

      What do you expect? All the people who know stuff get tired of retail and put their knowledge to better use. If the assistant can't answer your questions, ask them to get someone who does, you don't need to be a douchebag about it.

    I went for a job at DSE about 8 years ago only to be knocked back because I was over qualified... I was doing a course at TAFE in electronics at the time and was only in the first term. Needless to say I ended up dropping out of the course because I had no money.

    I went into Dick Smiths Powerhouse today, their range is rubbish, and while a few products have good specials, a good portion of it is massively overpriced.

    In other words, Woolworths will sell Dick Smith to another company, and then undercut and destroy that company by selling the same stuff at lower prices via Big W.
    ....

      I think you will find they will sell DSE and inject it back into the woolies supermarkets. coles has spent the last few years spending massive amounts of money renewing stores and changing the way they run them and now they are the ones on top. It would only makes sense that woolies would attempt to do the same. Makes me glad i chose them while I'm going through tafe.

    Local stores give you instant gratification and so still have a place.
    But if you have to buy by post then you might as well buy the cheapest, which is mostly Chinese derived, via the internet.

    The Dick Smith stores lost their way soon after Dick sold them. In general, the direction that they have taken is already filled by other, better supplied and usually cheaper, stores.

    The major losers will be the employees, as is usual.

    no wonder there losing sales compared to when tandy and dick smith were separate theres a rummour that dick smith was going to start another electronics buisness who knows maybe woolworths will sell it back to dick smith. ps woolworths your losing sales because people want dick smith elecronics not new rubbish stores.

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