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Woolies set to shutter a third of Dick Smith stores
Brenton Currie
Tuesday, 31 January 2012 15:15
Woolworths says it will 'accelerate' plans to restructure its burgeoning line of Dick Smith stores as consumers increasingly turn online for technology purchases.
Dick Smith to face store closures (Credit: Bidgee/Wikipedia)
In a statement posted on the Australian Stock Exchange [PDF version] (ASX) early this morning, Woolworths confirmed earlier rumours that it would close a number of stores that were under-performing while boosting it's consumer electronics presence at its Big W stores across the country.
'Dick Smith is an iconic speciality consumer electronics brand, with a strong team and its own leading online presence,' Woolworths CEO Grant O'Brien said in a statement today.
'However we believe that separating this speciality model from Woolworths is now the best option for the future of both businesses.'
A strategic review conducted both by internal and external participants found that the Dick Smith brand is taking a 'disproportionate' amount of investment and management attention five its position within the Woolworths group. It also found that consumer electronics should remain an important category for the group with products 'better delivered' through bigger name stores such as Big W.
Woolworths says it plans to explore - with the goal of 'optimising shareholder value' - the possibility of selling the Dick Smith chain after having already received 'a number of unsolicited approaches' in regards to the brand.
Other initiatives to be undertaken in order to boost the performance of the division include closing up to 100 'under-peforming' and as yet unidentified Dick Smith stores across the country as part of a rationalisation program. Staff impacted by store closures won't be made redundant, Woolworths says, with the company to offer redeployment elsewhere in the Woolworths group.
$300 million will be allocated in the first half of the 2012 financial year towards the restructuring of Dick Smith, Woolworths says.
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