The future of Dick Smith-owned Apple reseller Mac1 is up in the air following this morning's creditors meeting.
The Apple reseller was acquired by Dick Smith 18 months ago but was placed under administration last week along with Dick Smith’s other subsidiaries.
At the first meeting of creditors this morning, administrator Joe Hayes told attendees he believed that if Mac1 was sold as a separate business, it would produce a better return to creditors than if it was sold along with Dick Smith.
Mac1 is one of only three Dick Smith subsidiaries that is not in receivership. However, a deed of cross guarantee applies, which means if any of Dick Smith’s companies are wound up, every creditor of Dick Smith also becomes a creditor to that company.
This means in order for Mac1 to be sold off separately, Dick Smith creditors who weren’t originally Mac1 creditors may have input in the decision.
Hayes also pointed out that this situation does not typically formalise unless one of the companies involved is liquidated.
Dick Smith acquired Mac1 in September 2014 for $1 in an effort to bolster its education business, hiring founder Kenneth Hogg to head up the division.
At the time, Dick Smith director of investment relations David Cooke told CRN that the main aim of acquisition was to recruit Hogg for his knowledge of the education sector: “It wasn't a case of we bought Mac1 and got Ken. It's the other way around.”
The move was seen as a way to compete with rival JB Hi-Fi, which had a head start in the education sector through the acquisition of Network Neighborhood. Last year, JB Hi-Fi rebranded the arm to JB Hi-Fi Solutions, announcing it was on track to create a $500 million education business.
In May, Dick Smith revealed its “store-in-store” strategy to open dedicated Mac1 kiosks to service Apple products within existing Dick Smith stores. Mac1’s website currently lists 13 services desks in Adelaide, Albury, Armidale, Campbelltown, Canberra, Hobart, Innaloo, Marion, Melbourne, Narre Warren, Newcastle, Perth and Wollongong, and two dedicated retail stores in Canberra and Wollongong.
Founded in 1990, Mac1 provided Apple servicing as well as running an education technology business with account executives in Queensland, New South Wales, the Australian Capital Territory, Victoria and Tasmania.