Dick Smith had been owned by Woolworths since the early 1980’s. In early in 2012, Woolworths announced the business was non-core and underperforming and commenced a sale process. After a period of exclusivity, Anchorage acquired the business in November 2012.
Dick Smith is the largest consumer electronics chain in Australia and New Zealand by number of stores, with approximately 381 stores in October 2014. Dick Smith sells a wide range of consumer electronics products, including computers, printers, tablets, mobile phone handsets and connection plans, televisions, DVD players, audio products, and numerous related accessories and services. The business sells primarily through its physical store network, and also operates an award-winning website providing the full range of Dick Smith products and services.
Following the acquisition, Anchorage introduced a new CEO and further strengthened the existing management team with several new additions. In partnership with Anchorage, this management team immediately began implementing a highly successful program of operational, strategic, customer and cultural initiatives across all areas of the value chain. The major initiatives are listed below:
Stores and staff: KPI dashboards rolled out to all stores linked to staff incentives, implementation of a “Serve Forward” in-store staff training program, improved recruiting policies and rostering processes
Suppliers and buying: Developed strategic relationships with key suppliers and renegotiated agreements, opened a Hong Kong sourcing office for private label products
Marketing: New marketing program in collaboration with suppliers; “Dick Live Daily Deals” television advertisements launched
Inventory and supply chain: Significant clearance of old and obsolete stock; improved stock management and ordering practices; optimised freight movement including closure of two distribution centres
Other: Migrated website to a new digital platform allowing greater flexibility, functionality, efficiency and customer experience; renegotiated all key contracts and procurement agreements
In addition, during Anchorage’s ownership period Dick Smith began expanding its store network under a combination of three different store banners.
Dick Smith stores: Trialled a new store format, and prior to the IPO rolled out 10-15 new stores in high priority locations in Australia
David Jones Electronics Powered by Dick Smith: Entered into a concession agreement with David Jones to take over operation of the consumer electronics departments in all of their department stores (30 locations across Australia), commencing in October 2013
Move: Developed a smaller format, concept store focused on mobility products and accessories with an emphasis on fashion, under the Move brand. The first store opened in Bondi Junction in August 2013
As a result of the turnaround program and growth initiatives, EBITDA increased by over three times from FY13 to FY14.
Following the completion of the turnaround program and the transition to a growth agenda, Anchorage began to explore exit options. An IPO was successfully completed in December 2013.