Dick Smith is the Greatest Private Equity Heist of All Time

[TerraHertz]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11595560

'Greedy bankers' to blame for collapse, says Dick Smith

The founder of electronics chain Dick Smith has told Australian media outlets that "greedy bankers" were behind the collapse of the company he founded nearly 50 years ago.

Electronics retailer Dick Smith Group, which collapsed last month, announced yesterday it would close its 363 stores in Australia and New Zealand after its receivers couldn't find a buyer.

Nearly 3000 workers will lose their jobs - 430 of them in New Zealand.

Australian entrepreneur Dick Smith, who has not owned the business since 1982, told the Herald Sun that he thought the chain had a future ahead of it before its value was destroyed by a hasty and overvalued market float two years ago.

"I'm angry that these greedy bankers have destroyed a business that could have kept going for a long time," he told the Herald Sun.

Smith said he hoped Australia's corporate regulator would investigate the events around the collapse.

[Brumby]

I wonder if Mr Dick Smith is going to help them out.

While it is his name on the storefront and one that everybody recognises, I believe he did his part by selling to an organisation that operated the company successfully for a further 30 years.  It was just the recent pratts that stuffed it up.

He did well through his own hard work and sacrifice and whether or not he does something is neither here nor there as far as I am concerned.

[Stonent]

Found this on another forum...

I once threw out my collection of DSE and Tandy catalogs I had since I was a kid, including every monthly Tandy flyer 

And interesting that Tricky Dick was on the cover given that he sold the business a year earlier

Radioshack used to do a mailer every so often as well probably monthly but I never noticed as a kid, just cool stuff in the mail.  It was an excuse to bug dad to take me for my free 9V battery.

[VK3DRB]

I wonder if Mr Dick Smith is going to help them out.

While it is his name on the storefront and one that everybody recognises, I believe he did his part by selling to an organisation that operated the company successfully for a further 30 years.  It was just the recent pratts that stuffed it up.

He did well through his own hard work and sacrifice and whether or not he does something is neither here nor there as far as I am concerned.

Quote by Dick Smith according to the Adelaide Advertiser: “I just reckon there’s no money in consumer electronics — that’s why I sold out 30 years ago". If this is true, it begs the question: Did Dick Smith warn Woolworths about why he was selling up?  Maybe Dick Smith told Woolies there is no money in it but Woolworths were just fools getting into something they knew nothing about, thinking they could do a better job than Dick Smith.

[TerraHertz]

Quote by Dick Smith according to the Adelaide Advertiser: “I just reckon there’s no money in consumer electronics — that’s why I sold out 30 years ago". If this is true, it begs the question: Did Dick Smith warn Woolworths about why he was selling up?

Why should he have? There's no legal or moral obligation to 'gift' others with your own foresight. In fact if he'd tried, he'd probably have been insulted and told to keep his delusions/pessimism to himself.

[nowlan]

> consumer electronics.
Was he referring to white goods (kitchen) or black (hifi/tv) ?
Seems to be all they selling. Not sure if they went crazy on mobile phones like RadioShack.

[EEVblog]

Tricky Dick was wrong that you can't make money on consumer retail. Tell that to Gerry Harvey and whoever own JB HiFi. You just have to be #1 or #2 at it and be big, really big.
Dick Smith had tiny stores, that was their first problem. So he was right that Dick Smith itself as it stood couldn't win at consumer retail.

[vk3yedotcom]

Matt Ryan, the clever guy who wrote the Dick Smith Heist article for Forager is now pursuing a career outside funds management

https://foragerfunds.com/bristlemouth/signing-off-at-forager/

(wonder if he'd be up for an EEV video interview?)

Here's another, more recent article from Forager: https://foragerfunds.com/bristlemouth/closing-the-chapter-on-dick-smith/

[VK3DRB]

Tricky Dick was wrong that you can't make money on consumer retail. Tell that to Gerry Harvey and whoever own JB HiFi. You just have to be #1 or #2 at it and be big, really big.
Dick Smith had tiny stores, that was their first problem. So he was right that Dick Smith itself as it stood couldn't win at consumer retail.

I think they should have stuck with their core business - electronic components, kit sets, radios and the like. Jaycar seems to done well out of it. Dick Smith could have been the best in the massive PC enthusiast market at a time when it was run by shonky importers who knew nothing about customer service. Instead Dick Smith went down the path of flogging overpriced Windows Vista craptops to semi-literate computer users.

I actually bought a Dick Smith DVD player. When you turned it on, Dick Smith's cartooned head was on the menu. I hated that bloody head. It appeared on everything. For fun, you should include a Dick Smith cartoon head as an emoticon for a limited time.
There is something very positive about the demise of the Dick Smith business... NO MORE DICK SMITH CARTOON HEAD!

[dannyf]

"If this is true, it begs the question: !"

In a free market of willing buyers and sellers, you necessarily have people on both ends of a transaction who take opposite views of the asset.

Otherwise, the market doesn't function.

Plus, the buyer or the seller has no fiduciary responsibility to the other side.

You have some really strange views on how the market works.

[VK3DRB]

"If this is true, it begs the question: !"

In a free market of willing buyers and sellers, you necessarily have people on both ends of a transaction who take opposite views of the asset.

Otherwise, the market doesn't function.

Plus, the buyer or the seller has no fiduciary responsibility to the other side.

You have some really strange views on how the market works.

I know how the market should work. It should not only be based on demand and supply, but also on openness and honesty. I think they call it "in good faith."

If you buy a used car, you would want the seller to tell you everything they know that is wrong with it. Otherwise it is dishonesty by omission. There is no law requiring you to disclose for example that the car goes through a litre of oil every week. Years ago there was a used car dealer in Queensland, who would instruct all his salesmen to tell prospective buyers everything they knew that was WRONG with the car. They had to be 100% honest, else they would be fired. His business boomed.

As one wise person said to me: "Honesty should not be the best policy. It should be the only policy." Yes, strange views indeed.

[EEVblog]

I hated that bloody head. It appeared on everything. For fun, you should include a Dick Smith cartoon head as an emoticon for a limited time.

So what happens to the famous Dick Head? Do rights to it simply vanish into the ether?

[vk3yedotcom]

I hated that bloody head. It appeared on everything. For fun, you should include a Dick Smith cartoon head as an emoticon for a limited time.

So what happens to the famous Dick Head? Do rights to it simply vanish into the ether?

Given that the receivers are supposed to do what they can to return as much as possible to creditors might it be made available for sale as part of the company's trademarks and intellectual property?

If it goes cheap could Jaycar buy it just for a laugh (or so it doesn't fall into the wrong hands - as Gary and Dick are friends)? 

{the thought crossed my mind as to whether Dick himself would buy it back - but he strikes me as a person who is able to let go (eg a pattern of moving on to different ventures) and has better uses for his money}

[EEVblog]

If it goes cheap could Jaycar buy it just for a laugh (or so it doesn't fall into the wrong hands - as Gary and Dick are friends)?

Bugger that, I'd buy it just for kicks 
I don't want the name, just the face, and I can start a new company called Dick Face Electronics 

[vk3yedotcom]

Ah but Jaycar could buy it and then proceed to rebrand all its consumer products 'Dick Smith'. 

Eg this device.  http://www.jaycar.com.au/General-Consumer/Toys-%26-Games/Practical-Joker-Products/FART-MACHINE-W-3SOUNDS-%26-REMOTE-CTRL/p/GH1088 

To give them a perpetual reminder not to stray from their roots and go too far down the consumer path.

[VK3DRB]

If it goes cheap could Jaycar buy it just for a laugh (or so it doesn't fall into the wrong hands - as Gary and Dick are friends)?

Bugger that, I'd buy it just for kicks 
I don't want the name, just the face, and I can start a new company called Dick Face Electronics 

How about Dick Head Electronics? Featuring that head as the icon. You can start by selling matches. It appears the Dick Smith company may dropped that head some time ago. I have no idea when or why. In this advertisement, the head is everywhere. (The bald guy looks out of place.)



I appreciated Dick's "buy Australian" stance, despite him making a fortune out of imports. I also like his stance against greedy companies dodging tax, the population explosion dreams that only our politicians seem to want, and the highlighting the lack of philanthropy (or stinginess) by the filthy rich in Australia. Unlike most of our slimy politicians, Dick does have altruistic beliefs. I think he would make a good politician and would be good for Australia.

"SORRY DICK, IT DOESN'T WORK": With his foods he was patriotic. However there was one big stuff-up by some Dick Head. Dick Smith Foods was marketing ANZAC Biscuits as ANZAC Cookies. Dick Smith himself, his product managers, the packaging designers, the printers, the distributors, the quality control (if there was any), the stores and the general media should have detected the blunder. I ended writing to Dick Smith Foods and informing them that ANZAC Biscuits made for our soldiers in World War 1 were never called ANZAC Cookies, and that Australia was not and is not an American outpost. To their credit, the company immediately changed the name to Anzac Biscuits.

[dannyf]

"
I know how the market should work. It should not only be based on demand and supply, but also on openness and honesty. I think they call it "in good faith"

You say that you know how the market works and then your very next sentence proves conclusively otherwise.

The kind of market you want doesn't exist, because if it did, it would break down right away. How do you for example prove that you were honest when you said that your car worked, given that it broke down moment after the buyer had paid for it?

The market is the say it is for a reason. Naivety or lack of common sense isn't going to improve it, no matter how good it sounds on paper.

[vk3yedotcom]

Ferrier Hodgson has just advertised for expressions of interest in the intellectual property of the company (eg branding etc).

May be in newspapers or online (need to search - found it in the Facebook page for DS staff and ex staff)

[EEVblog]

Ferrier Hodgson has just advertised for expressions of interest in the intellectual property of the company (eg branding etc).
May be in newspapers or online (need to search - found it in the Facebook page for DS staff and ex staff)

Can't seem to find it.
If anyone has a link please post it.

[TerraHertz]

Ha ha imagine if it was cheap and Dave bought the IP rights.
The 'Dick Head' jokes were already done, but adding 'forum' should give some fine new combinations.

Edit: Here you go: http://www.applianceretailer.com.au/2016/03/dick-smith-ip-up-for-sale/#.VtZouL3DB64

WTH?  "EOI should be lodged via email before 5:00pm AEST on 4 March 2016"
Why the rush?

[stejep]

Do you think a EOI of $5 would get it.

Maybe The Real Dick Smith could buy his company back.

[TerraHertz]

It will be interesting to see what it goes for. Notice they made the interval too short for anyone to do a crowdfunding.
Imagine the 4chan crowd collectively buying it. That would bring new meaning to 'owned'.

[station240]

Ha ha imagine if it was cheap and Dave bought the IP rights.
The 'Dick Head' jokes were already done, but adding 'forum' should give some fine new combinations.

Edit: Here you go: http://www.applianceretailer.com.au/2016/03/dick-smith-ip-up-for-sale/#.VtZouL3DB64

WTH?  "EOI should be lodged via email before 5:00pm AEST on 4 March 2016"
Why the rush?

The receivers have a time limit on distributing any money they can recover. Anyway it's just expressions of interest, the next step is to actually look at who is going to pay the most.

I fear it could end up in chinese hands, and we get a flood of cheap nasty DSE branded TV and other consumer junk.

[EEVblog]

Ha ha imagine if it was cheap and Dave bought the IP rights.

It would have to go ridiculously cheap for that the happen, like me being the only bidder.

[TerraHertz]

You didn't say you didn't bid. 

We should all keep checking the 'What did you buy today? Post your latest purchase!' thread.