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EDIT:
It was sold for $20 million not $5 million.
Is it just me or does $5 million seem very very cheap? I'm wondering if that's a misprint. That's $15,000 per store not including online.
Woolworths Sells Dick Smith to Anchorage For $20 Million
neil on 26/09/2012 - 21:25
Last edited 27/09/2012 - 10:54
Last edited 27/09/2012 - 10:54
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The price would be low as they will have to set up a distribution centre to supply stock to their stores. Basically they are paying only for the company name. Not sure how much the real Dick Smith got when he sold out to Woolworths.
A quote from Dick Smith in January this year stated "I'll rubbish them the whole time. They wouldn't want to pay much,” he told the Sydney Morning Herald.
http://www.news.com.au/business/woolworths-divests-its-dick-…
Looks like he was right.
Thats crazy cheap.. Maybe they should have put it on Ozbargain!
I think at least 'one of the people' was lying.
it has 4,500 employees
you could probably get the employees to each kick in $1,200 to save their jobs
my feeling is that Anchorage bought it cheap to strip and dump like any equity company?
woolworths just want it gone
Looks like that figure was incorrect. According to CRN, Anchorage paid $20 million for the stores.
Still low when you consider:
Namesake founder Dick Smith sold the chain to Woolworths in 1982 for $20 million.
So they spent $383 million to restructure Dick Smith to sell it for $20 million later? Does not sound like a good investment to me.
From what Sydney Morning Herald has reported:
Dick Smith had 386 stores in Australia and New Zealand in February with pre-tax profits of $26.8 million in 2011, down 14.9 per cent over the past year.
Still, $26.8 million pre-tax profit sold at evaluation of $20 million…
It sounds like there was some imaginative accounting going on to make Dick Smith sound more profitable than it actually is. For example, some costs may have been written down against Woolworth's instead of Dick Smith.
you have to look at timescale
they bought DSE for $20 mil. in 1982, you can bet very few employees hang about for 30 yrs so the people who make that decision today aren't the same who were making decisions 5yrs ago let alone 30 yrs
also $20 mil. in 1982 is not $20 mil. in 2012!
counting for inflation, $20 mil. in 1982 was a BIG DEAL
what basically happened is that they thought they could build DSE up into a billion dollar company… why else would they pump in $383 mil.
but they obviously dont see a future in it now
Dick Smith will be run by Nick Abboud, who recently resigned from his senior executive position at Myer after 19 years with the department store.
Nothing to worry about then!
As some that had work for dicksmith for 7year and woolworth for 16years. what big Mod: Foul language up that is? they had to pay me out more went they close my store down. what a fire sale. my shop had 2milliom in stock that we sold for jack all in fire sale. i feel that going to sell me wow share at once.
I wonder if woolies will expand their electronics offerings in BigW now to compensate? Seems like an obvious place to start, the BigW electronics range is quite weak despite taking up as much floor space as some dick smith stores.
Likewise, perhaps they will look for electronics in masters.
there's nothing you can get at DSE you can't get somewhere else for a better price
i doubt they want to expand master's or bigW's product line when it doesn't fit with what their competition is doing
The $20 million price tag is only the initial step of what could be a long drawn out deal. They also say
"The deal is expected to be completed later this year, with Woolworths receiving $20 million this financial year and also retaining the potential to benefit from any upside resulting from a future sale of Dick Smith by Anchorage - Woolworths has not attempted to quantify the potential size of this possible benefit."
So it could be worth a lot more to Woolworths, but they haven't quantified the sale price.
does that mean i can not use wish gift card in dick smith any more?
i would think not.
No more staff discount as well :(
I still get Woolworths staff discount when ordering on-line :-)
Digging up this old thread… It appears that Anchorage is planning to float Dick Smith, i.e. IPO onto the stock market, at an market cap between $550 million and $620 million.
Source: InsideRetail
If Anchorage does manage to pull that IPO off, sounds like they are the real winner at the end.
that certainly wont make ozbargain, biggest lemon in town!
they'll prolly sucker enuff mum and dad investors and oldies
Yeah, if Anchorage's IPO of DS is successful, that's a pretty good exit.
Only amateur investors would invest in Dick Smith.
No competitive advantage at all. The cables, DIY stuff, after Tandy Electronics got taken out of the equation as well, Dick Smith started to become like a really crappy JBHifi, except without the hipsters. Looks like all the DIY business has now gone to Jaycar (they're pretty much the only major retailer that sells DIY electronics), but they can't really grow into a massive monopoly because not everyone is a DIY hobbyist.
Too much competition as well with DSE. Computer market - way too much competition thanks to the smaller computer shops, and everyone having smart frugal friends, armed with staticice.com.au
TVs - Myer, DJs, Hardly Norman, Jbhifi all are there.Maybe enough mums and dads who voted blindly, will pour enough cash into the IPO, but my opinion, nope.
For a moment I thought Sarah Palin was buying DSE. :)
Woollies staff cards will work until December 31st this year! Just putting it out there…
That's ridiculously low! Unless they are losing money and there's much debt as part of the transaction.
Edit: According to SmartCompany this morning,
Looks like the deal is less than what has been tipped. Again, $5m for Dick Smith stores seem to be very low, but consider Woolies has already taken $420 million in write-downs according to the article.
Just a reference. Optus/Singtel bought Eatability for $6m in late July. That's one single restaurant review website vs. big chain stores.