Exclusive: Closed Dick Smith stores to re-open

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Exclusive: Closed Dick Smith stores to re-open

Newly appointed Dick Smith CEO Nick Abood will re-open a number of stores previously closed by former parent Woolworths, while pushing into new product categories and online retail over the coming year.

Woolworths announced this morning it had ended a nine-month search for a buyer of its Dick Smith business, with private equity firm Anchorage Capital Partners snapping up the consumer retail chain for $20 million. 

Anchorage purchased all of the 325 stores currently in operation. Woolworths had initially planned to close 22 stores in the financial year 2013 following the closure of 74 in FY2012.

Earlier today, Anchorage revealed its intention to reverse the 22 planned closures.

Abood this afternoon told CRN it would also open a number of new stores throughout the next year, including the closed Dick Smith store in Melbourne's Chadstone retail centre, but declined to comment on further locations.

He also revealed a new push into the home appliance category, singling out coffee machines, with around 26 larger stores in line to move into the home appliance space.

Dick Smith performed well in its full year 2012 financial results, growing sales by 2.3 percent to $1.5 billion - a result largely attributed to store closure sales, clearances and promotional campaigns such as “Dick Does” and “Cheapest Ever”.

Abood said Dick Smith was well-positioned to perform in a normal operating environment without the help of bargain-bin sales.

He said the previous store closures had rid the business of debt, and with $290 million in net assets, Dick Smith was in a good position to regain its position as the go-to for technology.

Abood admitted Dick Smith’s low margins made it a difficult business to run, but said the focus on improving margins and executing on customer experience would convert customers walking through its doors. 

“You’ve got to execute very well - both your range and your marketing,” he said.

Alongside home appliances, one of the ways Abood planned to get Dick Smith back on customers’ radars was by increasing its product range, specifically in regard to Apple products. 

“It’s about getting into, for example, the iPhone 5. Ensuring that the A/NZ customer knows we are the place to shop for that. Being on trend with the latest technology,” he said.

“It’s about ensuring we’ve got the most dominant range, in areas like Apple accessories, and growing that. That’s the longer term strategy.

"But what sales will be driven by is newness. There are new products coming out every month, and we want to be out to market with those products first.”

Abood also saw promise in Dick Smith’s omni-channel offering -- traditionally a sticky point for bricks and mortar retailers. He told CRN the goal was to grow the online operation by double in the next year. 

“Dick Smith’s online business makes up 2 percent of sales already. For bricks and clicks its one of the better in Australia,” he said.

“They’re actually off to a good start. There’s 4000 SKUs [stock-keeping units] online currently, and we’d like to double that. We’d like to get it to 10 percent of sales."

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