Kogan Buys Dick Smith's Online Store

Gizmodo has spoken with online retailer Ruslan Kogan today about his company's purchase of Dick Smith's online retail business.

Kogan will "continue the legacy" of the Dick Smith brand and run the Dick Smith businesses as an online-only consumer electronics retailer in Australia and New Zealand.

"Dick Smith is an iconic Australian brand and we’re thrilled to be able to keep it alive, as well as Aussie owned and run," said Kogan. "We will invest in building and nurturing the Dick Smith community, and honour the great legacy of this Australian business.

"I remember as a kid always visiting Dick Smith to look for parts to upgrade my computer. There is a strong history of passion in the Dick Smith community for how technology can improve our lives, and we look forward to helping make it more affordable and accessible for all."

The receiver for Dick Smith Electronics Pty Ltd, James Stewart said "after a thorough process with multiple bidding parties we are pleased that Kogan is the successful acquirer of the Dick Smith online business. As Australia’s largest pureplay online retail website, Kogan is a natural and logical owner of the Dick Smith online business and we are particularly pleased that the Dick Smith brand will continue under its stewardship."

There will be a transition period during the closure of the bricks and mortar store network, and Kogan will operate the online business from 1 June 2016.

Customer information currently held by Dick Smith will be handled in accordance with the requirements of Australian and New Zealand privacy law during the change of ownership, with customers being contacted as of today. They will be provided with the option of having their details removed prior to the transfer to new owners.

Customers who provided their information to Dick Smith after the appointment of receivers on 4 January 2016 will not have that information disclosed to the new owners, Kogan said in a statement.

When Dick Smith entered into voluntary administration back in January, Kogan was one of the first retailers to say they would honour Dick Smith gift cards.

Dick Smith eventually announced it would be closing all of its stores on 25 February. Reports after the fact stated that a little help from the banks could have saved Dick Smith as it stood.

Rusan Kogan has gone on to reveal more details about the acquisition.

When asked about exactly what was included in the purchase, he replied "Kogan is buying the entire Dick Smith online business, including goodwill and brand."

He says the motivation to purchase Dick Smith was "To save the legacy of this great Australian brand," which he plans to do "by transitioning the business to an online only model, and providing Australians accessibility and affordability for the most in demand electronics products."

"Dick Smith is one of the most iconic Australian retail brands and we will be able to leverage the millions of dollars we’ve invested into online retail systems and architecture over the last decade to sustainably run the business."

He would not disclose the amount that he paid for the business.

There are no plans to merge the Dick Smith and Kogan brands, with Kogan saying "the Dick Smith brand is one of the most iconic Aussie retail brands and we will operate a dual brand strategy, continuing the legacy of the Dick Smith business as a pre-eminent technology retailer."

There are improvements to be made, though, and Kogan plans to do this by investing in the brand and rebuilding consumer trust. "We acknowledge that consumer trust takes years to build and can be damaged very quickly," Kogan said. "Ultimately, a brand grows when it delivers on its promises. We will work tirelessly to exceed the expectations of every Dick Smith customer with a beautiful shopping experience."

When asked if the Dick Smith range will change, Kogan said "the Dick Smith business will transition into a more innovative, online only, business model. This will allow us to leverage digital efficiencies to provide more accessible and affordable product ranges than what Dick Smith customers may have experienced in the last few years."

"The business will continue to focus on consumer electronics and appliances, offering a variety of private labels and the world's leading brands. The combined buying power of Kogan and Dick Smith will provide a compelling proposition to the world's leading brands and suppliers. This will enable us to trade on more favourable terms and pass on those savings onto consumers."

There are plans for changes to the backend of the business, as well. "The supply chain will be optimised to a more innovative, streamlined business model, ensuring competition among suppliers, and logistics efficiencies, to deliver Australians the best value every day," Kogan revealed. "Fulfilment will occur from distributions centres around Australia, with Aussies offered fast dispatch straight to their doors."

While Kogan says he is "not in a position to forecast at this stage" the future of the business looks promising.

"We do know that by leveraging our existing systems and infrastructure, we are in the best position out of any retailer in Australia and New Zealand to run Dick Smith as an online only retailer. The Dick Smith online offering will soon be better than ever."


Comments

    Just got an email from Dick Smith saying the same thing: "if you do not opt out... by 22 March 2016 then receivers will proceed" which is nice to be told up front and given the option.

    So does this mean that once this is all up and running that you'll now have to wait 4-5 weeks to receive goods purchased from Dick Smith online stores? Cause that's the biggest killer for me when/if purchasing from Kogan!

    Last edited 15/03/16 9:11 am

    Opted out. Never really valued paying an Australian a markup for grey import goods, so have never purchased from Kogan.

    I wonder if Mr Kogan was informed about the ratio of click and collect purchases vs paid delivery. One of the best aspects of the DS online system was the free pick-up option from one of their many conveniently located bricks and mortar stores. I assume Kogan won't offer this option, so prices are going to need to be very good to offset delivery prices.

      I believe since they are grey import products, it's quite competitive vs local stock + they offer free shipping.

    When DS started out they were more or less the best place to go for small electronic parts, bits and bobs, so I'm wondering if Kogan is going to honour the DS legacy stuff too. It would be a hard slog though, because I can get most if not all of those parts overseas via eBay at a basement price including postage. He'll need to lift his game imo.

    Last edited 15/03/16 9:49 am

      I don't know why so many are pining after this when you even state in your post you can get the parts bargain basement from ebay. It was a good move for the bricks and mortar stores to ditch hobby electronics, they take up valuable floor space, and you already have Jaycar if you really want to buy them from a bricks and mortar store staffed by people who don't know what you're asking for.

        My point is that DS started out with the small electronics stuff, it's what made it work in the first place. Without it what's the point of calling it Dick Smith, you may as well just call it Kogans Crap Online. As for Jaycar, they are just a joke.

        Generally I've found Jaycar in Wellington, NZ to be brilliant , helpful staff, especially when trying to check compatibility on some Arduino boards I was looking at. And atleast with a local store I wont be paying $5.00 do deliver a $2.00 part 8)
        Bye, bye, Dick, haven't bought anything from you in ages, probably wont change now.

          Out of the last five times I've gone to either of my local Jaycar, I think once they knew what I was talking about. The other four I asked, they took me to something unrelated, had no idea how to help me, and I walked around the store and found exactly what I wanted anyway.

    I give it 5 years before DS is absorbed in to the Kogan brand. Kogan is just buying a sinking ship that is beyond saving.

      Because obviously you know more about running an online only retailer than Ruslan and his team. If only they'd taken the time to contact you before the purchase.

        Well I am a consumer who has been burnt by Dick Smith in the past. And this is not the first time DS has announced it's shutting down. And lets all forget that big sale they had a few years ago where the staff took first pickings of the stock. IMO the brand has been badly damaged. And the majority of people who bought from DS online did so to collect their purchases in store with click and collect.

        It doesn't take a rocket scientist to work out what will happen here.

          I was one of those people at a DSE store at opening time to find out they didn't have squat, you know who's fault it was? Mine, or if I really wanted to deflect blame the person who leaked an internal email, not the workers in the store. It's a clearance sale of aged stock across the entire company, not every store will have inventory of said aged stock, and more power to the employees if they pick it up as a perk of the job. The actual list of items was not advertised at all.

          I was also one of the people to walk into Dick Smith Geelong when they closed (I happened to be driving past on holiday) and pick up a $1000 flagship phone for $450. You win some, you lose some.

          I've had to work retail when we've had ONE item of product we were de-ranging was drastically reduced over other competitors and someone posted it on OzBargain. Ever had to work the till at a sale and answer 100 phone calls from people wanting to haggle price on the $500 previously $2000 reduced item because it's out of box when the shop next door is still selling it for $2000?

          You know who was burnt by Dick Smith? The people who bought xmas gift cards, or the people who paid in full for a TV or sound system one day to be picked up next week only to find out the company went bankrupt and they're now an unsecured creditor. You weren't burnt, you're just having a whinge.

          Last edited 15/03/16 1:54 pm

        Compusa and Circuit City were both bricks and mortar shops in the USA, both with an online presence, both with a similar retail model to Dick Smith. Both went bust, too much stock that was overvalued, receivers sold off there online shops with the customer databases. Both bought by an online retailer and restarted with an online presence only, leveraging off the customer database. Both gone within a few years in the history of cyberspace.

        We've seen this before. 5 years is probably too optimistic - I give it 2 years before Kogan works out how to pick off the commercial supply chains to increase the breadth of products on Kogan's own website and mine the database.

    So what happens to warranties for things purchased from Dick Smith Online going forward under Kogan? I purchased a couple of things in 2nd half of last year from the online store with 12-24 warranty - does Kogan look after warranty on these or is it a back to manufacturer deal?

      Our friends at Lifehacker have reached out to Kogan for an answer on this - with no news as yet. Hopefully we will know soon.

    Many decades ago I bought a big bag of stuff from DSE, built a schmitt trigger + other things.
    I learned a lot.
    I I went on to be a teacher at High School, teaching electronics. I used DSE kits a lot to get my students to have fun while learning a bit about such stuff

    I think that DSE needs to keep going, not just to make a profit, but to keep the spark alive for the young ones who will explore Mars and beyond.

    After years of undercutting local suppliers, I'd be very very surprised if local suppliers agree to support this new Kogan venture.

    Last edited 15/03/16 11:15 pm

    After years of undercutting local suppliers, I'd be very very surprised if local suppliers agree to support this new Kogan venture.

Join the discussion!

Trending Stories Right Now