By Claire Reilly
Following Woolworths’ formal strategic review of Dick Smith, the retail giant today announced that it will sell off the troubled consumer electronics retailer, saying that the future of Dick Smith “could be better realised through new ownership”.
The move, which was announced shortly after the company released positive sales results for the last six months, will see the closure of as many as 100 “underperforming” Dick Smith stores across the country, with Woolworths set to shift its consumer electronics focus to the Big W retail chain.
“Dick Smith is an iconic specialty consumer electronics brand, with a strong team and its own leading online presence,” said Woolworths Limited CEO, Grant O’Brien. “It has developed into a trusted technology retail and services hub, carrying world‐leading brands and with strong market share in several key categories.
“However we believe that separating this speciality model from Woolworths is now the best option for the future of both businesses.
“A divestment of Dick Smith will enable the Woolworths group to focus more investment on serving customers in its core business with a strong multichannel offer, backed with market-leading fulfilment systems and an effective store network,” he said.
According to the company, “the investment and management attention given to Dick Smith have been disproportionate relative to its position within the Woolworths group [and] the company’s current focus is on accelerating growth in its core trading divisions.
“Consumer electronics will remain an important category for Woolworths and is better delivered through BIG W and its expanding multichannel offer”.
Despite the store closures, which will see affected staff ‘redeployed’ to other branches of the Woolworths group, O’Brien insisted that “business will continue as usual for Dick Smith, its customers, suppliers and staff, building on the strong Christmas sales period.”
The company announced that it has received “a number of unsolicited approaches in relation to Dick Smith” which it will now explore.
Although rumoured to be interested in the Dick Smith chain, JB Hi-Fi CEO Terry Smart recently denied his company was interested in making a bid for the retailer.