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Category: Business, Economics and Finance / Retail

Dick Smith stores to close after receivers unable to find buyer

Thursday, 25 Feb 2016 12:15:45 | Thuy Ong

Receivers Ferrier Hodgson said it was a disappointing outcome. (ABC News)

Dick Smith stores across Australia and New Zealand are expected to close over the next eight weeks after its receivers were unable to find a suitable buyer for the company.

The remaining 301 stores in Australia and 62 in New Zealand will close, resulting in the loss of 2,460 staff in Australia, and 430 in New Zealand.

In a statement to the Australian Securities Exchange, receivers Ferrier Hodgson said it was a disappointing outcome.

"While we received a significant number of expressions of interest from local and overseas parties, unfortunately the sale process has not resulted in any acceptable offers for the group as a whole or for Australia or New Zealand as standalone businesses," receiver James Stewart said.

"The offers were either significantly below liquidation values or highly conditional or both."

The receivers said all Australian employee entitlements would rank as priority and are expected to be paid in full.

Last month the electronics retailer went into receivership after sales and cash generation were below expectations in the key December trading period.

Dick Smith said at the time the directors were unable to secure support from the company's bankers to provide finance for restocking to see it through the next month to six weeks.

That prompted them to appoint McGrathNicol as administrators to run the firm while restructuring or sale options were explored.

However, after the appointment of administrators, Dick Smith's lenders appointed receivers, Ferrier Hodgson, to run the firm and protect their financial interests.

Earlier this month the Fair Work Ombudsman launched an investigation after evidence emerged the failed chain might have underpaid its employees.

Ferrier Hodgson discovered the discrepancies, worth as much as $2 million.

More to come.

AustraliaPlus


 

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