Dick Smith chain fails

[amalan11]

I am shocked a chain as large as DS can fail like it has.

I feel very sorry for anyone who has a gift card or deposit on an item as it looks like they will be left with nothing . I read that they may be able to do a credit card chargeback but even thats  not certain,It just gos to show even major retailers cannot be trusted  as they seem to have been trading knowing they could not secure stock to meet orders.

Apparently the administrators hope to sell as a viable business but I cannot see that happening as I think under the circumstances People will not trust the brand again ,

I would be very careful about buying gift vouchers after this as Dick Smith I would have thought were safe due to their size .It will be interesting to see how much people loose in worthless vouchers and deposits ,I think it will be heaps more than Angus and Robertson the booksellers as I bet DS made a fortune in Xmas gift voucher sales they now will not honour. 

Very sad business really. ..

[lurker172602]

So if it was known before Christmas that they were going down doesn't that mean they were selling products not fit for the purpose of sale (or whatever the correct term is).  That is, if they knew or were fairly certain that gift cards would probably not be honoured, how could they continue to be sold?

I realise they were probably not acting strictly illegally but were most certainly trading immorally and dishonestly.

[punch*drunk]

I agree they probably shouldnt have been selling gift cards. But clearing stock was probably necessary and perhaps they thought they could trade out of it?

[lloydslights]

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@debra9275 wrote:

I think it's a shame to see another of our big retailers go under- I blame the current owners

https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/

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Excellent article, Debra.

The following is dated September, 2014.

http://www.retailbiz.com.au/2014/09/17/article/Anchorage-Capital-Partners-sell-off-remaining-Dick-Sm...

DEB

[debra9275]

thanks Lloyds.... company vultures

http://www.smh.com.au/business/retail/this-could-be-the-end-of-the-road-for-dick-smith-says-forager-...

this part is important too

In an October 2015 blog post titled Dick Smith is the greatest private equity heist of all time Forager Funds analyst Matt Ryan outlined how Anchorage Capital stripped inventory from the retailer before bringing it back to the public market. Forager Funds has never owned shares in Dick Smith Holdings. Anchorage Capital declined to comment. 

Anchorage Capital bought Dick Smith from Australian retail giant Woolworths in a deal worth $115 million in 2011 and floated it with a market capitalisation of $520 million less than two years later. 

In November Fairfax Media reported Forager's view that Dick Smith was struggling to pay suppliers and could become insolvent if sales did not improve over Christmas. 

so they stripped the company then publicly listed it at a high price that was too high - also getting in shareholders money

[amber-eyed-girl]

Gift cards can be something to be careful with, at all times. Some have expiry dates printed on them, some don't (but can still have an expiry, you need to ask). I remember being at a major store a few years ago, where a customer had her gift card declined. She argued it had no expiry date. The staff member said that the new ones, did, so the older ones, by default did, and were old enough to have expired...

Disgusting way to ripoff the customer. At the time it was bought and given, it would not have had one. Changing the rules, after the fact, highly dubious behaviour.

[lyndal1838]

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@the_great_she_elephant wrote:

Unfortunately, probably not if the firm is in administrtion. I could be wrong, but I think it's the same deal as with bankruptcy - once the administrators move in, all bets are off.

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When a business is bankrupt it cannot continue trading.

The first step is to call in the Administrators and it is their job to make the call whether to put the business into liquidation (close it down) or to continue trading (Administration)  with the view to selling the business as a going concern.

When it continues trading the Administrators guarantee that all suppliers who supply goods during the period of Administration will be paid.  What happens to payments to suppliers of goods prior to the Administrators taking over is in the lap of the gods and will only become clear in the future.

[debra9275]

here's another one in trouble

http://www.smartcompany.com.au/finance/49453-laura-ashley-collapses-into-voluntary-administration.ht...

[moonflyte]

One of my Westfield gift cards expired with $150 still left on it. My oh wrote them an email and talked to them on the phone and they reinstated the full amount. 

Don't let them steal your money.

[heiter22]

I bought a Laptop here from the Ebay Dicksmith Store, paid the money and never received it. I sent several times an email asking when the laptop will arrive and never got a reply, only a reply saying that due to large volume of emails it takes longer until they can reply to me. Finally the Dicksmith store replied to me with the following after about 6 weeks of purchase:

'We have reviewed your order and contacted the store, it appears that your order was cancelled on 13 January 2016 and a refund request was sent for processing.
The store also informed that they have got two display items and there are no plans to replenish the product.

Regarding your refund, due to being under receivership we cannot issue refund for products purchased before 5th January 2016. You may submit a claim as an unsecured creditor to the Group’s Administrators, McGrath Nicol.'

I submitted this claim as unsecured creditor last year in February 2016. I asked a few times via email about an outcome and was asked to wait. Today I called McGrath Nicol and they said its very unlikely I will receive a refund. Then I contacted ebay and they told me they cannot help as their refund policy is only a 30 day timeframe after purchase. 

So it looks like at this stage, there is nothing I can do. I lost the money without receiving any product. I find it shocking that apparently unsecured creditors do not receive their money back. There were court cases and I wonder how that outcome is manageable with alignment to consumer laws?!

I am posting this here and appreciate if anyone has an idea what else I could try or to inform me how that is legally possible?

Thanks

[lyndal1838]

If only you had opened a paypal dispute when your item failed to turn up you would probably have had your refund at the time.

It is far too late now to do anything through paypal and as you have been told, there is very little likelihood of any joy from the liquidators.