{"id":90643,"date":"1999-12-31T00:58:00","date_gmt":"1999-12-30T13:58:00","guid":{"rendered":"http:\/\/smartoffice.com.au\/dick-smith-to-be-placed-into-administration-today-ferrier-hodgson-appointed\/"},"modified":"1999-12-31T00:58:00","modified_gmt":"1999-12-30T13:58:00","slug":"dick-smith-to-be-placed-into-administration-today-ferrier-hodgson-appointed","status":"publish","type":"post","link":"https:\/\/staging.strixdevelopment.net\/smartoffice\/1999\/12\/31\/dick-smith-to-be-placed-into-administration-today-ferrier-hodgson-appointed\/","title":{"rendered":"Dick Smith To Be Placed Into Administration Today, Ferrier Hodgson Appointed"},"content":{"rendered":"

Dick Smith is set to be placed into administration today, Tuesday, after the major banks said “enough is enough” for the troubled consumer electronics retailer.<\/p>\n

ChannelNews understands that the banks have appointed James Stewart from Ferrier Hodgson as receiver and McGrathNicol will act as the company’s administrator.<\/span><\/div>\n

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Chairman Rob Murray said Dick Smith’s go-for-broke discount sale in December had not generated as much cash as management had expected, continuing a downward trend in the second quarter and leaving it with no option but to call in an administrator.<\/span><\/font><\/div>\n
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“The directors formed the view that any success in obtaining alternative funding would not have been sufficiently timely to support short-term funding requirements and allow the company to order required inventory during the next four to six weeks,” Mr Murray said in a statement released through the ASX. <\/span><\/font><\/div>\n
“The directors have been unsuccessful in obtaining the necessary support of its banking syndicate to see it through this period. <\/span><\/font><\/div>\n

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“The directors are of the view that without this support, there is no option other than to appoint a voluntary administrator.” <\/span><\/font><\/div>\n<\/div>\n

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Dick Smith offered to close several stores and lay off staff but this was not enough for the banks, insurance Companies including QBE were already refusing to insure any future stock going into Dick Smith stores.<\/span><\/font><\/div>\n

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Prior to the peak trading period the National Australia Bank, the Bank of New Zealand and HSBC Bank Australia made available $135 million which was secured by property, ChannelNews understands that Dick Smith got the money after forecasting certain revenues, those targets have not been met with the Company set to announce the appointment of an administrator today.<\/span><\/font><\/div>\n

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In an announcement to the Australian Securities Exchange on Monday the company said it had requested its shares be placed in a trading halt pending an announcement about its “funding position and debt financing covenants”.<\/span><\/font><\/div>\n

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Insiders have told ChannelNews that Dick Smith’s financial and “stock position” is “a mess”, we have also been told that the Company has spent the holiday period negotiating with banks in an effort to keep the Company afloat.<\/span><\/font><\/div>\n

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If Dick Smith does go under and is placed into administration pressure is set to mount on the Australian Companies and Security Commission to conduct an investigation into the actual float of the Company, after insiders told ChannelNews that same store sales were not as indicated in information provided to potential investors prior to the float. <\/span><\/font><\/div>\n

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 Investors already had to contend with two earnings downgrades since August, including $60 million in inventory write-offs, pushing shares more than 80 per cent lower.<\/span><\/font><\/div>\n

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The fallout from the placing of the Company into administration is that several distributors and vendors could end up not being paid. <\/span><\/font><\/div>\n

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Trade Insurance Companies warned suppliers prior to Christmas that if there was any problems with Dick Smith that they would only be paid between $0.48 and $0.62 in the dollar for stock supplied prior to restrictions being placed on the supply of stock to the mass retailer. <\/span><\/font><\/div>\n

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Macquarie analysts have said that since the late November inventory write-off – about 20 per cent of its total value – management had shifted their main focus to reducing inventory and debt levels at the expense of profits. “The level of sell-through and potential cannibalisation of sales from the clearance activities would further muddy the outlook,” the analysts told clients, halving their target price to 50c a share. <\/span><\/font><\/div>\n

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Harvey Norman chief Gerry Harvey also criticised Dick Smith’s heavy discounting strategy, labelling it “suicidal”. Sales figures for the crucial Christmas trading period are not expected for some time, although CBA economists reported that early transaction data indicated solid spending ahead of the period. But sales at large retail stores rose 0.5 per cent in November, easing from 0.7-0.8 per cent in the prior six months.<\/span><\/font><\/div>\n
<\/div>\n","protected":false},"excerpt":{"rendered":"

Dick Smith is set to be placed into administration today, Tuesday, after the major banks said “enough is enough” for the troubled consumer electronics retailer.<\/p>\n","protected":false},"author":42,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[28,179],"tags":[],"class_list":["post-90643","post","type-post","status-publish","format-gallery","hentry","category-archive","category-retail","post_format-post-format-gallery"],"yoast_head":"\nDick Smith To Be Placed Into Administration Today, Ferrier Hodgson Appointed - Smart Office<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/staging.strixdevelopment.net\/smartoffice\/1999\/12\/31\/dick-smith-to-be-placed-into-administration-today-ferrier-hodgson-appointed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dick Smith To Be Placed Into Administration Today, Ferrier Hodgson Appointed - 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