Dick Smith staff face uncertainty in receivership
New Zealand customers are feeling the effects of Dick Smith's financial troubles already.
The retailer stopped accepting vouchers just hours after it confirmed it was in voluntary receivership. It comes after its shares fell 85 percent last year.
Knockout sales in Auckland weren't enough to attract many customers this morning, but those loyal to the retailer were still shocked.
Even more disappointed was one customer who wasn't allowed to use his $400 gift voucher.
The company's receiver announced it won't honour outstanding gift vouchers or refund deposits paid for goods.
"I suspect that means that those people will move into being unsecured creditors, so the chances of them being able to redeem those vouchers may be quite slim," says Consumer NZ chief executive Sue Chetwin.
As well as affecting customers, more than 3000 staff face uncertainty cross Australia and New Zealand.
Despite a massive clearance sale in the lead-up to Christmas, poor December sales were cited as part of the reason for today's receivership.
Appearing on Australian TV this morning, founder Dick Smith said it was a sad day.
"It's sad for me, but let's hope someone will come and along and save it."
Mr Smith sold the company to Woolworths in 1982, which 30 years later it sold it to investment company Anchorage Capital Partners.
Anchorage floated it on the share market in 2013, and Mr Smith says that hurt the company.
"I think when Woolworths sold it for about $80 million, $90 million, that's what it was worth. Then it got re-floated for $500 million and I think that was ridiculous. It's proved to be ridiculous."
But a commentator in New Zealand says the company has been in trouble for decades.
"They're not a specialist like they used to be," says Andrew Parsons. "They don't compete with the home store-type approach like Harvey Norman."
But Mr Parsons says it will have to compete with the likes of Harvey Norman if it wants to continue, or become a tech specialist operation, which would involve a lot of investment.
Until the company's future is decided, its 393 stores in New Zealand and in Australia will operate as normal.