topic Re: Dick Smith chain fails in Community Spirit

Dick Smith chain fails

amalan11 — Tue, 05 Jan 2016 08:36:50 GMT

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. ..

Re: Dick Smith chain fails

lionrose.7 — Tue, 05 Jan 2016 08:41:18 GMT

Same in New Zealand not going to honour the gift certificates, hope people who got them for christmas have cashed them in 😞

Re: Dick Smith chain fails

latina4621 — Tue, 05 Jan 2016 09:55:21 GMT

very sad to see this happening

i agree i think people will think twice now before buying vouchers for a gift not matter who the store is.

Re: Dick Smith chain fails

cee-dee — Tue, 05 Jan 2016 10:52:31 GMT

From reading reports about this, it all seems to be dodgy "financial dealing", literally legalised robbery?

Re: Dick Smith chain fails

lurker172602 — Tue, 05 Jan 2016 11:16:44 GMT

I have no idea of the legal angle, but not honouring gift vouchers (especially at the volume sold at this time of year) must come pretty close to fraud mustn't it?

Re: Dick Smith chain fails

the_great_she_elephant — Tue, 05 Jan 2016 12:04:05 GMT

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.

Re: Dick Smith chain fails

chameleon54 — Tue, 05 Jan 2016 13:16:31 GMT

@lurker172602 wrote:
I have no idea of the legal angle, but not honouring gift vouchers (especially at the volume sold at this time of year) must come pretty close to fraud mustn't it?

From a legal point it hinges on wether the company was trading while insolvent. DS suspended shares on the stock exchange on Monday as it tried to re-finance loans etc. When it became clear the refinancing would not occur, the company called in the administraters. Had negotiations on finance been succesfull the company would have continued trading.

Wether selling gift vouchers was fraud would depend on the time that company executives became aware that refinancing would not be succesfull. It appears that this was in the last couple of days, but who really knows. ?

Re: Dick Smith chain fails

cee-dee — Tue, 05 Jan 2016 13:54:05 GMT

These sort of things have happened in the UK too. As far as I know, only one company agreed to honour gift vouchers when it went in to administration. Holders of such things become minor unsecured creditors.

As far as your current company woes go, it seems from what I've read that those hiding behind the company either knew or at least suspected there were problems and that's why they had the massive stock clearance beforehand. The idea there being to turn as much stock into cash leaving little for creditors but..... suspicions of corporative misdeeds can't easily be turned in to "evidence"?

Re: Dick Smith chain fails

punch*drunk — Tue, 05 Jan 2016 22:08:25 GMT

They were looking like going belly up a few weeks before Christmas and it was all over the news so hopefully that was enough of a clue for people not to buy gift vouchers. I bought a mini hifi and was concerned at first about warranty if the store went under, then i realised it was reduced from $100 to $30 and I figured it was cheap enough to take the risk.

Re: Dick Smith chain fails

debra9275 — Tue, 05 Jan 2016 23:16:35 GMT

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/

Re: Dick Smith chain fails

lurker172602 — Tue, 05 Jan 2016 23:23:55 GMT

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.

Re: Dick Smith chain fails

punch*drunk — Tue, 05 Jan 2016 23:56:42 GMT

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?

Re: Dick Smith chain fails

lloydslights — Wed, 06 Jan 2016 00:06:49 GMT

@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/

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-Smith-shares/SYQPWFJWDR

DEB

Re: Dick Smith chain fails

debra9275 — Wed, 06 Jan 2016 00:11:31 GMT

thanks Lloyds.... company vultures

http://www.smh.com.au/business/retail/this-could-be-the-end-of-the-road-for-dick-smith-says-forager-funds-boss-20160104-glyqsu.html

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

Re: Dick Smith chain fails

amber-eyed-girl — Wed, 06 Jan 2016 04:44:46 GMT

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.

Re: Dick Smith chain fails

lyndal1838 — Wed, 06 Jan 2016 05:21:38 GMT

@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.

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.

Re: Dick Smith chain fails

debra9275 — Thu, 07 Jan 2016 23:16:38 GMT

here's another one in trouble

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

Re: Dick Smith chain fails

moonflyte — Thu, 07 Jan 2016 23:25:48 GMT

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.

Re: Dick Smith chain fails

heiter22 — Mon, 27 Feb 2017 10:09:41 GMT

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

Re: Dick Smith chain fails

lyndal1838 — Mon, 27 Feb 2017 15:34:24 GMT

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.