Dick Smith Holdings Ltd. entered administration after missing revenue and profit targets, just two years after its former private-equity owner listed the Australian electronics retailer with an enterprise value of A$534 million ($384 million).
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Things are going from bad to worse for struggling Australian electronics chain Dick Smith, with receivers allegedly appointed to the company after it voluntarily suspended its shares yesterday.
Dick Smith went into a trading halt on the Australian stockmarket on Monday.
Chairman Rob Murray said that sales and cash generation in December were “below management expectations”.
It bought Dick Smith from Woolworths in 2012, in a deal reportedly valued at about $A115 million, before selling down in 2013 in an IPO that valued the company at $A520.3m.
The retailer, which operates 62 stores in New Zealand and employs 3300 staff on both sides of the Tasman, has also appointed McGrathNicol as voluntary administrator.
The statement said that the directors remained confident in the long-term viability of the business but “there was no option other than to appoint a voluntary administrator”.
A source close to the company has confirmed that advisory firm McGrath Nicol has been called in as administrator, with the company expected to confirm the appointment on Tuesday morning.
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The retailer first warned in October that full year profit could fall as much as 15 per cent to between $37 million (NZD $39.38 million) and $43 million (NZD $45.76 million), as it stepped up discounting and advertising to restore sales growth.
