12 Jan 2016

Dick Smith chief executive quits

1:26 pm on 12 January 2016

Chief executive of Dick Smith, Nick Abboud has resigned a week after the Australian electronics retailer went into receivership with debts of $A390 million.

Receivers Ferrier Hodgson said they had appointed Don Grover, a former head of Retail Fusion chain, as an interim chief executive, as they placed advertisments seeking potential buyers for the company.

Nick Abboud

Nick Abboud Photo: You Tube

Mr Abboud was appointed chief executive when private equity company Anchorage Capital floated Dick Smith in August 2012.

So far more than 40 parties have indicated an interest in buying the retailer, Ferrier Hodgson said.

Indicative bids have to be submitted by January 27, after which a short list of prospective buyers will be able to do due-diligence and make a detailed formal bid.

The New Zealand operation, with 62 shops, is said to be profitable and an attractive proposition.

Dick Smith has 393 stores in Australia and New Zealand, and was put into receivership a week ago when its banks refused to keep it afloat after sales last month were weaker than forecast.

The stores are trading as normal while the receivers try to sell the business as a going concern.

Some rival companies in Australia have said they will honour gift cards sold by the company before it was placed into voluntary receivership.

Australian govt considers gift card protection

The Australian government, meanwhile, has said it will consider a proposal to protect customers who have bought gift cards after Dick Smith was put in receivershiop.

Dick Smith retail store.

Dick Smith retail store. Photo: WikiCommons

The receivers have said Dick Smith gift cards would not be honoured, meaning consumers would have to stand in line with other unsecured creditors of the company and may only get a small fraction of their money back.

Independent Senator Nick Xenophon is to introduce legislation to force retailers to place money from such cards in a trust, and hold company directors personally liable for any losses.

Government frontbencher Steven Ciobo said the government was open to the idea.

"Ultimately the government does want to protect consumer interests. We've got dedicated consumer laws exactly for that purpose, to look at protecting consumers.

"But there's no monopoly on good ideas - we're happy to have a look at it."

Senator Xenophon also called for an independent inquiry into the corporate watchdog - the Australian Securities and Investments Commission (ASIC) - and demanded answers from the private equity company Anchorage Capital Partners (ACP) which company floated Dick Smith Holdings for $A520 million in December 2013.


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