Dick Smith: Greed destroyed company

Dick Smith has around 2500 employees in Australia and New Zealand (Getty)
Dick Smith has around 2500 employees in Australia and New Zealand (Getty)

The man who founded the Dick Smith chain has criticised the "greedy bankers" he says were to blame for its collapse.

The electronics retailer has announced it will close all its stores across Australia and New Zealand.

That will leave 430 staff in New Zealand out of work, along with 2460 in Australia.

Dick Smith has told Australian media: "A couple of years ago a firm called Anchorage Capital bought it for about $90 million, which is probably what it was worth".

"Then they floated it 15 months later for $500 million and everyone thought, 'hold on, that's not possible', and of course it wasn't."

Dick Smith Holdings will close all its stores in New Zealand and Australia over the next eight weeks. The 430 New Zealand staff will be paid what they are legally entitled to, up to a maximum of $22,160.

The receiver says there were a number of parties interested in buying the retailer. But nobody presented an offer that would have been better than the alternative: liquidating the company and selling its assets to retrieve something for its creditors.

It is a sad end for a company that Dick Smith started in 1968 when he opened a shop underneath a Sydney car park, servicing car radios. He later began selling gadgets to electronics hobbyists and expanded across Australia through the 1970s.

Dick Smith sold his company to Woolworths in 1982.

Thirty years later Woolworths sold the company to Anchorage Capital Partners for about AU$92 million.

Within two years Anchorage had sold the business, listing it on the Australian share market with a valuation of AU$520 million.

Analysts say Dick Smith struggled in recent years with too much competition and too much debt.

The chain had moved from their niche area of gadgets to try to compete in the wider area of appliances.

But analysts say its demise does not mean other big retailers will go the same way.

Newshub.

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