# DSH - DSHE Holdings



## System (18 November 2013)

Dick Smith operates 359 physical stores, providing it with the largest number of consumer electronics stores in Australia and New Zealand. Dick Smith's physical store network consists of, in Australia, 267 Dick Smith branded stores, 30 David Jones Electronics Powered by Dick Smith stores and one Move store concept, and in New Zealand, 61 Dick Smith branded stores.

http://dicksmithholdings.com.au/investor-centre/

It is anticipated that Dick Smith Holdings Limited (DSH) will list on the ASX on December 2nd, 2013.


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## chief71 (19 November 2013)

*Re: DSH - Dick Smith Holdings*



System said:


> Dick Smith operates 359 physical stores, providing it with the largest number of consumer electronics stores in Australia and New Zealand. Dick Smith's physical store network consists of, in Australia, 267 Dick Smith branded stores, 30 David Jones Electronics Powered by Dick Smith stores and one Move store concept, and in New Zealand, 61 Dick Smith branded stores.
> 
> http://dicksmithholdings.com.au/investor-centre/
> 
> It is anticipated that Dick Smith Holdings Limited (DSH) will list on the ASX on December 2nd, 2013.




IMO you would have to have a death wish to invest in this........a lower quality version of the Myer float


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## Craton (20 November 2013)

*Re: DSH - Dick Smith Holdings*

Agree with chief71.

Just my take from the side lines but after WOW sucking the guts out of DSE for decades then flicking it off (to a private mob I believe) when the biz became a bit of a lead balloon, I smell a rat.

Still, once floated any number of M&A scenarios could ensue, HVN and JBH come to mind. Whatever, the current owners will pocket the fruit and good luck if one can stag the float.


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## notting (20 November 2013)

*Re: DSH - Dick Smith Holdings*

Who the hell would buy it?
I can't wait to see who the major steak holders would be.
Look out for what ever else their in and look to get short.


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## Smurf1976 (20 November 2013)

*Re: DSH - Dick Smith Holdings*

DSH (or DSE as most would refer to it in any context other than the stock) was slowly but surely killed off by Woolworths from the early 1990's onward. 

It used to be an electronics store as such, then they turned it into a generic retailer that just sells consumer goods which need batteries or have a cord attached. At that point it became a direct competitor to every other store selling the same items (of which there are plenty). Meanwhile Jaycar replaced DSE as the "real" major electronics store that actually sells electronics.

It's a classic example of something which practically every technical person I've met laments. Non-technical managers take something that works just fine, try to squeeze a few extra $ out of it, and end up ruining it. Then they move on to their next target, leaving the mess that remains for someone else to fix (or more commonly, shut down altogether).

I don't see where the company can really go now in terms of business strategy. The original business model is so far gone as to be virtually impossible to resurrect whilst the current business competes against everyone from online sellers to Kmart to JB Hi-Fi to Harvey Norman - all of which have either a lower cost structure and/or offer a wider variety of goods which brings people into the store.


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## VSntchr (30 June 2014)

*Re: DSH - Dick Smith Holdings*

Dick Smith has bucked the trend of retail downgrades, announcement out today showing that Q4 Like-for-Like sales are running at 4% and FY14 will beat prospectus on sales numbers.

Profit targets have not been increased so it looks like sales have performed well but prices have been cut to drive this..

Still, its a lot better than the announcements coming out of many other retailers lately.


Just to add some perhaps irrelevant scuttlebutt, I needed an external USB graphics card to run a third monitor from my laptop and I didn't even bother looking at Dick Smith, JB Hi Fi etc. I'm time poor lately and it was just far too convenient to go to eBay and find an Australian seller with a quick delivery. I know that these stores have an online presence these days - but I rarely find them beating eBay prices.


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## notting (30 June 2014)

*Re: DSH - Dick Smith Holdings*

Thanks for the heads up. I'm positive about retail at present.
But this will continue to be my hedge!!


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## ROE (30 June 2014)

*Re: DSH - Dick Smith Holdings*



VSntchr said:


> Dick Smith has bucked the trend of retail downgrades, announcement out today showing that Q4 Like-for-Like sales are running at 4% and FY14 will beat prospectus on sales numbers.
> 
> Profit targets have not been increased so it looks like sales have performed well but prices have been cut to drive this..
> 
> ...




Try your local MSY for computer related gears ... rarely anyone can beat them on price ...
http://www.msy.com.au/home.php

I reckon JB is no longer cheap ..Dick Smith under new management seen to sell stuff very cheap and have regular sale


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## VSntchr (19 August 2014)

*Re: DSH - Dick Smith Holdings*



ROE said:


> Try your local MSY for computer related gears ... rarely anyone can beat them on price ...
> http://www.msy.com.au/home.php
> 
> I reckon JB is no longer cheap ..Dick Smith under new management seen to sell stuff very cheap and have regular sale




Result this morning has beaten prospectus. Looks like management is doing a good job and taking some market share.

Doesn't bode well for JBH that Dick Smith is saying that the positive momentum from Q4 is continuing in to the new FY, whereas JBH put out some shocker July figures...JBH is also right on the major support at $17.40ish...


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## ROE (19 August 2014)

*Re: DSH - Dick Smith Holdings*



VSntchr said:


> Result this morning has beaten prospectus. Looks like management is doing a good job and taking some market share.
> 
> Doesn't bode well for JBH that Dick Smith is saying that the positive momentum from Q4 is continuing in to the new FY, whereas JBH put out some shocker July figures...JBH is also right on the major support at $17.40ish...




yeah DSH is a threat to JB i reckon, they sell stuff seriously cheap, the margin must be razor thin and they try to push volume, I been monitor their price and sale on ebay and ozbargin they start to gain traction with lot of buyers

they tend to use social media and technology to target consumers, something jb lack and leave door open for DHS to assault.

I sometimes shake my head and wonder how much margin they made if they flock stuff this cheap


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## McLovin (19 August 2014)

*Re: DSH - Dick Smith Holdings*



ROE said:


> yeah DSH is a threat to JB i reckon, they sell stuff seriously cheap, the margin must be razor thin and they try to push volume, I been monitor their price and sale on ebay and ozbargin they start to gain traction with lot of buyers
> 
> they tend to use social media and technology to target consumers, something jb lack and leave door open for DHS to assault.
> 
> I sometimes shake my head and wonder how much margin they made if they flock stuff this cheap




JBH spend a lot of money to look cheap. The faux cheap looking floor boards and the whole Persian bazaar feel to it. I was in one the other day. It surprises me that they still have so much floor space devoted to DVD and CD's. Haven't they got the memo yet?


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## skc (19 August 2014)

*Re: DSH - Dick Smith Holdings*



ROE said:


> I sometimes shake my head and wonder how much margin they made if they flock stuff this cheap




So true. I bought a mouse recently at DSH after comparing prices with online sites. They were $1 more expensive and saves me waiting 6-10 days. 

Seriously the costs to sell bricks and mortar compared to online must be higher than $1.

Nonetheless,, the market liked the immediate result and the LFL growth in the new year. I also laughed at the comment from Anchorage regarding escrow shares... which basically said something like "We won't sell, until we sell" or something to that effect.


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## McLovin (19 August 2014)

*Re: DSH - Dick Smith Holdings*



skc said:


> So true. I bought a mouse recently at DSH after comparing prices with online sites. They were $1 more expensive and saves me waiting 6-10 days.
> 
> Seriously the costs to sell bricks and mortar compared to online must be higher than $1.
> 
> Nonetheless,, the market liked the immediate result and the LFL growth in the new year. I also laughed at the comment from Anchorage regarding escrow shares... which basically said something like "We won't sell, until we sell" or something to that effect.




I bought a Logitech wireless keyboard and mouse yesterday for $28 from Officeworks. I just checked and DSH are selling the same for $50. I didn't compare prices before I bought it. I was in OW for some stationary and just thought at that price it was worth it. If that's the sort of margin they're on then DSH ain't struggling.

Technology retailing just seems to be in a race to the bottom. It's amazing how prices have collapsed in the last decade or so.


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## VSntchr (19 August 2014)

*Re: DSH - Dick Smith Holdings*



McLovin said:


> I bought a Logitech wireless keyboard and mouse yesterday for $28 from Officeworks. I just checked and DSH are selling the same for $50. I didn't compare prices before I bought it. I was in OW for some stationary and just thought at that price it was worth it. If that's the sort of margin they're on then DSH ain't struggling.
> 
> Technology retailing just seems to be in a race to the bottom. It's amazing how prices have collapsed in the last decade or so.




I opted for Kmarts "Office One" brand. Wireless keyboard and mouse combo for $20 flat. Couldn't believe the price, and the quality has thus far been . Crazy times when a burger at a fancy restaurant costs more than a wireless keyboard/mouse combo.


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## notting (19 August 2014)

*Re: DSH - Dick Smith Holdings*



ROE said:


> yeah DSH is a threat to JB i reckon, they sell stuff seriously cheap, the margin must be razor thin and they try to push volume, I been monitor their price and sale on ebay and ozbargin they start to gain traction with lot of buyers




That is the art of retail.
They are still priced below the float price despite today's out performance.
So if you think there is a future then they are a buy.

They are certainly having a go.  





Commendable.

JB has fallen through support today on the back of this, it seems.  
Been shown up?


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## skc (19 August 2014)

*Re: DSH - Dick Smith Holdings*



notting said:


> JB has fallen through support today on the back of this, it seems.
> Been shown up?




DSH doesn't sell Apple ware while JBH's falling LFL sales was specifically attributed to tablets... so that may be the reason. Or what JBH management wants us to believe.


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## hiddencow (19 August 2014)

*Re: DSH - Dick Smith Holdings*

Haven't looked at the financials but my last online shopping experience with DSE was terrible and put me off purchasing from them again (and probably investing in them as well).

Ordered online. 3 weeks later nothing. Tried calling them, 30 mins on hold and gave up. I think a lot of others were having similar problems. In the end put in a paypal claim and got a refund.
I can order something from the Uk, have it dispatched within one day, sometimes hours and arrive in my hands within 1 week. Australian retailers still have a long way to go.

Ever since floating, DSE has been offering a lot of sales, including selling gift vouchers for 10% off, apple products for 15% off etc. These gift vouchers were sold online and I think responsible for a large part of their online sales growth. Is it sustainable in the long run and profitable? Or are they just trying to show some good growth figures after listing.


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## Julia (19 August 2014)

*Re: DSH - Dick Smith Holdings*



> DSH - Dick Smith Holdings
> 
> Haven't looked at the financials but my last online shopping experience with DSE was terrible and put me off purchasing from them again



My experience is the direct opposite.  I go there because I'm technologically hopeless, and the staff's willingness to explain stuff is hugely better than JB HiFi.  Great after sales service as well.  I had a printer that was faulty after a few months and it was without question replaced.



> (and probably investing in them as well



Up to you of course, but it seems a bit of an odd parameter on which to make an investment decision, given the sales experience will almost certainly vary from store to store as I've just suggested above.


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## So_Cynical (19 August 2014)

*Re: DSH - Dick Smith Holdings*



Julia said:


> My experience is the direct opposite.  I go there because I'm technologically hopeless, and the staff's willingness to explain stuff is hugely better than JB HiFi.




Is this a good time to tell you most of them don't have a clue...goes for 90%+ of retail staff in general.


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## Julia (19 August 2014)

*Re: DSH - Dick Smith Holdings*

Well, there you go, So Cynical.  Maybe reflects the attitude you have toward them?   I've found most retail staff across all retail to be on the whole helpful and genuinely interested in doing their best for my enquiry.

And I don't know on what basis you can make a judgement about the usefulness of staff or otherwise in a shop you've never visited.  Maybe things just happen differently outside of capital cities.


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## ROE (20 August 2014)

*Re: DSH - Dick Smith Holdings*

I generally know exactly what I want on all the stuff I buy so I rarely require staff assistance 
I go for the cheapest price on stuff I want.

I only buy quality brands and I prepare to pay for them I just look for the retailer that sell me that item 
at the cheapest price


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## hiddencow (20 August 2014)

*Re: DSH - Dick Smith Holdings*



Julia said:


> My experience is the direct opposite.  I go there because I'm technologically hopeless, and the staff's willingness to explain stuff is hugely better than JB HiFi.  Great after sales service as well.  I had a printer that was faulty after a few months and it was without question replaced.
> 
> Up to you of course, but it seems a bit of an odd parameter on which to make an investment decision, given the sales experience will almost certainly vary from store to store as I've just suggested above.




Of course I don't base an investment decision based on how much I like/dislike a company. My assessment was on their online and support systems.

Your experience with retail staff is based on somebody with little technological knowledge as you mentioned. For most the technology savy, there are much better resources out there. Of course from an investment perspective, if most of the customers coming in are not technology savy and the staff manage to get them to buy stuff and leave happy, then that's a good thing.

DSH up again today and JBH down. Overall, I think JBH is a much better business and brand. I'll have to look into it closer to see whether it's worth a buy if the price keeps dropping.

I am sceptical of any numbers published by DSH this year after being tinkered with by private equity.


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## Julia (20 August 2014)

*Re: DSH - Dick Smith Holdings*



hiddencow said:


> Of course I don't base an investment decision based on how much I like/dislike a company.



This is what you said earlier and on what I based my comment:


> Haven't looked at the financials but my last online shopping experience with DSE was terrible and put me off purchasing from them again (and probably investing in them as well).






> Your experience with retail staff is based on somebody with little technological knowledge as you mentioned.



I simply know my limitations when looking for something new.  Doesn't mean I'm a total dope.



> For most the technology savy, there are much better resources out there.



A qualifier would be that not everyone wants to buy on line, often because of the very experience you quoted before.  Buying at retail level ensures the capacity to physically return a faulty product and stand there until something is done.
Further, what resources are available will depend on where one lives.   Regional towns are going to have more limited options than capital cities.


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## notting (21 August 2014)

*Re: DSH - Dick Smith Holdings*



skc said:


> DSH doesn't sell Apple ware while JBH's falling LFL sales was specifically attributed to tablets... so that may be the reason. Or what JBH management wants us to believe.




I always thought tablets where a joke.  Steve Jobs made the legendary decision to put out the Iphone which was based on his teams development of a tablet.  He had the epiphany "This would make an awesome phone" and took the market by storm.
Then almost as an afterthought they put out the tablets that many jumped on on the back of the Apple mania.  It is now dying and is useless apart from some niche areas.  
The PC\laptop will make a come back and the tablet should morph into a Nokia Lumia 1320 phablet with 6-inch 720p (or something like that) should take over as you really can use it to check stuff on the net without needing a magnifying glass and dwarf fingers, whilst using it as and smart phone. Can they promote it well enough to get people to realize it?  They don't know how important that marriage is yet.  Buy one and you will not regret it, even though the apps are not quite their yet, they will improve.  It does all the jobs well enough.  The bad is it doesn't sync with outlook only with cloud mail.

Back to dick. It's really hard to imagine how they can do well unless they are somehow the super cheap retailer, crazy sales, kogan with a shop front.  That would be interesting.  So far they are pulling off something quite special.  Good luck to them for having a go.  I gave them absolutely no chance on the old model.


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## VSntchr (21 August 2014)

*Re: DSH - Dick Smith Holdings*



notting said:


> I always thought tablets where a joke.




I have never owned one and my natural human instinct that provides resistance to change is well in-force when I think of replacing either my computer or phone with a tablet!  

I do hope your predictions hold truth, sir!


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## ROE (21 August 2014)

*Re: DSH - Dick Smith Holdings*

I actually think tablet will be the future, it will get more powerful and lighter and more integrated into a PC like
but portable, light and powerful (Microsoft Surface 3)

I own iPad since it first release, I love it, it portable and simple and I can sit on the couch and read AFR or magazines or take with me traveling keep me occupied for hours on the airplane playing simple games. 

the Microsoft Surface Pro 3  is looking good so I may grab one when it release next Month 
didn't like the first 2 release... cant compete with iPad

I am a bit of a tech junkie, though I am not the early adopter of everything but anything that is good
and meet my need I am usually the early adopter of them

http://www.microsoft.com/surface/en-au/products/surface-pro-3

back to DHS I usually don't like this sort of business, too much competition not enough margin
the odd of picking winner is fairly hard.


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## TPI (25 August 2014)

*Re: DSH - Dick Smith Holdings*

Interesting to do a comparison of sales and number of stores to JBH: DSH generates $1278M sales from 377 stores (ie. $3.39M sales/store) and JBH generates $3484M sales from 182 stores (ie. $18.59M sales/store).

I wonder when there is a point of diminishing returns by having more and more stores, particularly if a longer-term aim is to generate greater online sales?

Too many stores may also expose you to more commercial property leasing risks eg. when the retail property market improves and market rents increase due to supply/demand balances.

I think similar may apply for companies like WOW/WES who in time may generate more sales of groceries through their online channels with home delivery/in-store pick-ups.

And perhaps there may be less of a need for lots of retail property and instead fewer but larger industrial property to act as distribution centres?


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## goccipgp (25 August 2014)

*Re: DSH - Dick Smith Holdings*

Looks like a breakout at 2.32 with a short term target of 2.710. Technical buying signal at au stoxline.


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## crypto (25 August 2014)

*Re: DSH - Dick Smith Holdings*



goccipgp said:


> Looks like a breakout at 2.32 with a short term target of 2.710. Technical buying signal at au stoxline.




And it was all downhill from there.


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## skc (25 August 2014)

*Re: DSH - Dick Smith Holdings*



TPI said:


> I think similar may apply for companies like WOW/WES who in time may generate more sales of groceries through their online channels with home delivery/in-store pick-ups.
> 
> And perhaps there may be less of a need for lots of retail property and instead fewer but larger industrial property to act as distribution centres?




A bit off topic but I recently came across this article about "dark store" which is quite fascinating.

P.S. If there was ever a zombie apocalypse (Walking-Dead style), I am going to get my supplies from a dark store!

http://www.insideretail.com.au/blog/2014/08/11/woolworths-dark-store/


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## Huskar (26 August 2014)

*Re: DSH - Dick Smith Holdings*



skc said:


> A bit off topic but I recently came across this article about "dark store" which is quite fascinating.
> 
> P.S. If there was ever a zombie apocalypse (Walking-Dead style), I am going to get my supplies from a dark store!
> 
> http://www.insideretail.com.au/blog/2014/08/11/woolworths-dark-store/




This was certainly the trend over the in the UK. Apart from zombie apocalypses being more likely over there, it also rains a lot so why bother going outside when the store comes to you?...

This one of the difficulties Tesco is facing vs competitors such as Lidl.


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## notting (20 March 2015)

*Re: DSH - Dick Smith Holdings*

DSH is cutting a reasonably large amount of staff due to getting more into online selling which is a good thing because every time I walk past a store I see hardly anyone in them and then go to JB which is buzzing.
If you judged it purely on what the store traffic looks like you'd have at about where WOW had it!


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## luvbhatnagar (28 October 2015)

*Re: DSH - Dick Smith Holdings*

Yet another crash for Dick Smith - not particularly promising.


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## Ves (28 October 2015)

*Re: DSH - Dick Smith Holdings*

New guidance is 37-40m NPAT.   At the lower end that's a PE of just under 6.

At 30m NPAT it's still only a PE of 7.

Admittedly that guidance is (cautiously) dependent on a reasonable holiday / summer period.

The problem is,  in the last few years their cash conversion (at a brief look) looks horrible,  and it's well under the reported NPAT figures. They are saying that has been because of working capital constraints and that it'll start unwinding from the 2016 FY onwards.  The cynical investor may think that there was quite a bit of profit "massaging" when this floated,   and potentially still is some of it in the reports.

There's about $70m debt in the 2015 report,   plus around $18m in lease liabilities.

That's not too bad at the moment,   but if the earnings cycle really bites,  retail businesses have lots of fixed costs and embedded operational leverage and things can turn south really quickly.  You don't have to go back too far before the "Private equity turnaround" of Dick Smith to see how bad it can get.

Still,  it's priced for a lot of doom.  Anyone want to comment on the probabilities that they need to raise capital in the next few years,  or can they find a floor for their earnings somewhere around $25-30m?

edit:  I wonder how much of their current downgrade has to do with them stopping the Apple "promotional" offers (ie. heavy discounting) they were using to get foot traffic into the stores.  I remember at the time of the 2015 results analysts were pretty bearish when they announced this.


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## McLovin (28 October 2015)

*Re: DSH - Dick Smith Holdings*

I was speaking to someone in retail this morning about DSH. Their blunt assessment "there's no f**kin money in their categories". Apparently their buying doesn't suggest they're expecting a big holiday period. Private equity did a pretty good job of flogging this as a growth stock.

Retail is tough, and even tougher for resellers these days. Browngoods used to be a bonanza ten or so years ago, now margins are tight the foot traffic doesn't bring in the $$$ it used to, just a lot more tyre kickers. Whitegoods are going the same way now that JBH and a few others have started aggressively going after that market.


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## skc (28 October 2015)

*Re: DSH - Dick Smith Holdings*



McLovin said:


> I was speaking to someone in retail this morning about DSH. Their blunt assessment "there's no f**kin money in their categories". Apparently their buying doesn't suggest they're expecting a big holiday period. Private equity did a pretty good job of flogging this as a growth stock.
> 
> Retail is tough, and even tougher for resellers these days. Browngoods used to be a bonanza ten or so years ago, now margins are tight the foot traffic doesn't bring in the $$$ it used to, just a lot more tyre kickers. Whitegoods are going the same way now that JBH and a few others have started aggressively going after that market.




It's the greatest private equity swindle of our times... along with Myer. 

The market knew they are in trouble since the report... or it'd have show some bounce at PE 7x. 

DSH were doing a lot of these 20% off ebay deals which was probably a good indication of how bad things were.


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## Ves (28 October 2015)

*Re: DSH - Dick Smith Holdings*

Thanks gents.   Interesting to see how this plays out,   most likely I'll only be an on-looker. Still too much risk in the price for what is,  as McLovin said,  essentially a no-growth stock in a highly competitive retail industry.    Too hard to come up with a decent estimate of earnings across the cycle for me.

It appears that they seem to have got their product mix very wrong leading up to the current earnings forecast,  which ruined their margins.   Looking at JBH and HVN,  they seem to have had much more positive outlooks at their respective AGMs.

The big problem with retail is,  no matter how recognised the brand,  it still takes a good operator to manage the business,   not any old dummy can do it.


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## notting (28 October 2015)

*Re: DSH - Dick Smith Holdings*



notting said:


> Who the hell would buy it?
> I can't wait to see who the major steak holders would be.
> Look out for what ever else their in and look to get short.




Evan Lucas said the market was speculating on how Dick Smith could lose so much momentum in a month while Harvey Norman powers ahead.

"What exactly has happened in October to drop the expectation so drastically is not clear," he said.



notting said:


> If you judged it purely on what the store traffic looks like you'd have at about where WOW had it!




Yeah, heading back there, (what WOW sold it for) after what? - some kind of accounting trickery to do the float and follow up with 12 months of BS. Now leaking out the reality in bits.  Stores a still dead compared with JB floor action it remains a farce.


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## luvbhatnagar (28 October 2015)

*Re: DSH - Dick Smith Holdings*

Thanks all.  Yep, agree with all the comments.  As you say, not easy to run a retailer in this market particularly if you stuff up your product mix and poor management.  I also wonder if there is any merit in the takeover rumours that floated recently particularly with the price depreciating by over 40% just in the last 2 weeks alone ..


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## Ves (29 October 2015)

*Re: DSH - Dick Smith Holdings*

Great article on DSH from Forager Funds Management's blog:

https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/


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## Gringotts Bank (29 October 2015)

*Re: DSH - Dick Smith Holdings*



Ves said:


> Great article on DSH from Forager Funds Management's blog:
> 
> https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/




Interesting thanks.  Dick Smith himself wouldn't be happy to see what happened to his old business.  afaik, he was as straight as they come in his business dealings.


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## Ves (30 November 2015)

*Re: DSH - Dick Smith Holdings*

Currently trading for less than Anchorage paid for it....  although,  clearly retail investors can't play tricks with funding their purchase with inventory liquidation and just have to watch as management write-down the bloated value of said inventory instead.

Ouch!

I'll be very curious to see if Dick Smith survives.   Paying that debt down is going to be really tough without any cash flow and any capital raising will be extremely dilutive if they can even get any willing investors.


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## skc (30 November 2015)

*Re: DSH - Dick Smith Holdings*



Ves said:


> Currently trading for less than Anchorage paid for it....  although,  clearly retail investors can't play tricks with funding their purchase with inventory liquidation and just have to watch as management write-down the bloated value of said inventory instead.
> 
> Ouch!
> 
> I'll be very curious to see if Dick Smith survives.   Paying that debt down is going to be really tough without any cash flow and any capital raising will be extremely dilutive if they can even get any willing investors.




Still can't believe that open price... 20c!

This was $2 as recently as August (not that it means anything).

Didn't trade it nearly as well as I should.


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## notting (30 November 2015)

*Re: DSH - Dick Smith Holdings*



Ves said:


> Great article on DSH from Forager Funds Management's blog:
> 
> https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/




Now when DJs gets floated again, everyone go back and read this.  Watch to see any kind of run up and short the shi7 out of it when the run up tires or after 12 months!

Also I cannot believe how many analysts where giving this float and subsequent trading prices the thumbs up.  I was even abusing some of them in writing at the time!

Here is a note I got from Wise Owl to which I responded basically calling them mental cases.



> Investment View
> 
> We are attracted to Dick Smith’s new leadership and strong balance sheet. Within a short period, management have achieved an outstanding operational turnaround. Their substantial shareholding incentives further improvement amid a stabilising competitive landscape. Whilst its rebound is expected to moderate, historic brand investment ~$500million and upside to sales per square metre supports the outlook for new investors.
> 
> Offer Price: $2.20 | Listing: 4th Dec




Wise Owl are supposted to be savvy smart dudes finding little gems in the market due to their ability to spot smart management and value!! They were certainly not alone either.  Fricken bloody hell!


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## notting (30 November 2015)

*Re: DSH - Dick Smith Holdings*

Under a Bold Heading – 
Tim McArthur of the Motley Fool wrote on  October 17, 2014   - *"3 reasons to buy retail stocks now"*
(Whilst The miracle turn around DSH was trading at a heady $2.10 or there abouts.)
*"Dick Smith Holdings* Ltd, Kathmandu Holdings Ltd and Super Retail Group Ltd: "



> "Dick Smith Holdings Ltd (ASX: DSH) this week announced improving sales and stated that it saw significant opportunities to expand its store presence. With the stock trading on a forecast price-to-earnings (PE) ratio of just 10x and sporting a forecast yield approaching 7%, it’s a stock worth considering."




What a miracle.

As a side show Kathmandu was trading at 3.00 or so.


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## Knobby22 (30 November 2015)

*Re: DSH - Dick Smith Holdings*

Yes, retail, competition everywhere including online.


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## notting (30 November 2015)

*Re: DSH - Dick Smith Holdings*

And I am remaining mindful of this and looking for the after Christmas hangover for an entry on the short side.

written on 15 October 2014.
It got higher than the article suggested, and still is, but the song is the same.

http://www.gizmodo.com.au/2014/10/is-harvey-norman-stock-headed-for-a-crash/



> Gerry Harvey’s recent comments on Australia’s high wages were also mentioned as a challenge to the business.
> 
> All in all, the 60-page report comes to the conclusion that Harvey Norman as a stock has reached its peak at $3.70 per share:
> 
> ...




Watching that resistance at $4.20


----------



## joeno (1 December 2015)

*Re: DSH - Dick Smith Holdings*

Might buy in soon. It's still a high revenue / profit business, and for the price a bargain. What do you guys think?


----------



## notting (2 December 2015)

*Re: DSH - Dick Smith Holdings*



> Electronics retailer Dick Smith has jumped as much as 24.9 per cent on news that *Algy Pereira*, *the boss of Woolworth's Big W* division, has resigned to take on a senior role at struggling electronics retailer Dick Smith.
> Dick Smith has confirmed Pereira has been appointed director of retail operations but denied speculation he was hired as an immediate replace for chief executive Nick Abboud.  *Pereira, worked with Mr Abboud at Myer* for many years, including two years as general manager of electrical, resigned from his role at BIG W
> And this –
> *Mr Murray*, who took the chair in February from Anchorage Capital Partners chairman Phil Cave, denied reports in online trade publications that Mr Abboud had been given four months notice




You can see why they are doing so well, look the the legends  they pick out of the pool of carnage.


----------



## Tyler Durden (2 December 2015)

*Re: DSH - Dick Smith Holdings*



joeno said:


> Might buy in soon. It's still a high revenue / profit business, and for the price a bargain. What do you guys think?




I think it might be a good short to mid-term buy for the prospect of a takeover. However, I don't like the fundamentals of it. I checked out the store yesterday during the so called "sale" which allegedly had 70% off. In the Sydney CBD store, there were probably around 20 people max browsing, and I saw only two people at the counter buying.

I only saw one thing heavily discounted, which was an old PS3 game. Everything else was either slightly discounted or not discounted at all. If they can't attract people during a "70% off" sale, then I don't have confidence that they would be able to attract customers during non-sale times.

Additionally, they seem to be a bit of a mess in terms of what they're selling. They sell phones to computers to tvs to cameras to blenders. I think they would do well to try to specialise in just one or two things. When people want a blender, I doubt they'd think of Dick Smith as their first option.

Anecdotally, my friends and I hardly consider Dick Smith as the first option for even their main products, as they are normally more expensive than JB or other online venues.

It will be interesting to see how they try to turn this around, but I strongly doubt they can.


----------



## howmanyru (2 December 2015)

*Re: DSH - Dick Smith Holdings*

Looks like they are trying to become primarily an online retailer. When i try and buy something it's rarely in their shop, and the discounts only apply to online purchases. They left their run too late and can't survive on Dicks legacy alone.


----------



## Calvin27 (3 December 2015)

*Re: DSH - Dick Smith Holdings*



Tyler Durden said:


> In the Sydney CBD store, there were probably around 20 people max browsing, and I saw only two people at the counter buying.




I don't have much to add wrt investment on DSH, but Melbourne shops were full to the brim. Full load of staff working seeemingly to the maximum of their ability. Lots and lots of purchases - all counters manned. This is the two main cbd stores in Melbourne. The suburb stores, my mate has advised was no different.


----------



## poverty (3 December 2015)

*Re: DSH - Dick Smith Holdings*



Calvin27 said:


> I don't have much to add wrt investment on DSH, but Melbourne shops were full to the brim. Full load of staff working seeemingly to the maximum of their ability. Lots and lots of purchases - all counters manned. This is the two main cbd stores in Melbourne. The suburb stores, my mate has advised was no different.




Strange you and your friends have all of the DSH stores under surviellance and scoped out.  Noone I know, and I work with a lot of young people, even consider going into a DSH if they live within cooey of a JB-Hifi, let alone bothering to report on it to all and sundry.  They have less stuff, a lot of their stuff is seemingly just random **** you wouldn't even expect to be in that kind of store (blenders, wat??) and whatever they have costs more than it should.


----------



## notting (3 December 2015)

*Re: DSH - Dick Smith Holdings*



poverty said:


> Strange you and your friends have all of the DSH stores under surviellance and scoped out.  Noone I know, and I work with a lot of young people, even consider going into a DSH if they live within cooey of a JB-Hifi, let alone bothering to report on it to all and sundry.  They have less stuff, a lot of their stuff is seemingly just random **** you wouldn't even expect to be in that kind of store (blenders, wat??) and whatever they have costs more than it should.




Very true.
Further they make a huge mistake in not discounting or even being competitive on the little items.  You can get a lot of foot traffic on the small stuff if you promote it right, 'Rivers' comes to mind.  The guy who runs that is rich!!
Dick totally fails and makes it obvious they are trying to gouge you on the little stuff, just making you walk out thinking, it's still a losers den.


----------



## Calvin27 (4 December 2015)

*Re: DSH - Dick Smith Holdings*



poverty said:


> Strange you and your friends have all of the DSH stores under surviellance and scoped out.  Noone I know, and I work with a lot of young people, even consider going into a DSH if they live within cooey of a JB-Hifi, let alone bothering to report on it to all and sundry.  They have less stuff, a lot of their stuff is seemingly just random **** you wouldn't even expect to be in that kind of store (blenders, wat??) and whatever they have costs more than it should.




Not sure what your problem is mate, but I am simply relaying my observations which seem contrary to your experience. Yes, I'd go to MSY before I go to JB and JB before I go to Dickies. That wasn't the point I am making - my point is the fire sales, at least in the melbourne cbd stores are clearing. Take what you will. 

I never made the claimed we have all the stores scoped out - only 2 main cbd stores and two in the SE suburbs. If you had any clue about 'young people' you'd know that 80% of the recent visitations were ozbargainers. No need to get worked up over an observation mate.


----------



## Smurf1976 (4 December 2015)

*Re: DSH - Dick Smith Holdings*

"Old" Dick Smith Electronics pretty much owned the market as the only mainstream retailer that sold actual electronic parts. Sure, there was competition to some extent and it was only ever a niche business but Dick Smith was the name that came to mind for most if they wanted to buy something like that.

"New" Dick Smith Holdings is just another place to buy TV's, phones and kitchen appliances but doesn't have the biggest range or lowest prices in any particular field. So there's no reason to go there given that someone else always has more and/or is cheaper.

Last time I bought anything there would be probably 4 years ago. These days it's either Jaycar or a specialist for actual electronics as such, and anyone from Harvey Norman to Myer to JB Hi-Fi can sell you a new TV. 

They've gone down the "little bit of everything but not a lot of anything" track and very rarely does that work. Plenty have tried that over the years and most fail. It's rather hard to be both cheap and up market at the same time, even harder to be an "expert" on everything from toasters to TV's.

"Attempt to please everyone and nobody will like it" are words that come to mind here. The only way you can make that work is if you're big enough to actually do 2 or more different things at once. Eg two radio stations broadcasting from the same studios but targeting completely different audiences. Qantas + Jetstar. Pub / club with 3 dance floors all with different DJ's playing very different music. Etc. In those cases you're offering multiple products to consumers so have the ability to get each of them right.  

That isn't really the case for DSH however since the stores aren't physically big enough to have a full range of TV's, blenders and everything in between under the one roof. Someone else always has more and someone else is cheaper too. That being so, there's really no reason to buy things there, a point that many seem to have realised judging by how the company is going.


----------



## notting (7 December 2015)

*Re: DSH - Dick Smith Holdings*



Smurf1976 said:


> "New" Dick Smith Holdings is just another place to buy TV's, phones and kitchen appliances but doesn't have the biggest range or lowest prices in any particular field. So there's no reason to go there given that someone else always has more and/or is cheaper.




Well, unless that is you put out a second downgrade in the space of about 6 weeks and say your writing off stock with 70% discounts.  Now that would be a reason to go there!!

And as always, as a pleb who wants to a walk the talk, I did!!!! 

I went there today, thinking I'm going to be falling over 60" TVs being thrown away, computers, phones, what ever took my fancy.  Hmm to my surprise there was really not that much on offer!  Couldn't believe it.  Nothing really grabbed me, had it I would have bought it.  It looked like someone had busted the door down over night and ripped half the stuff off the shelves.  It's a Monday and I'm pretty sure it wasn't a sales rush especially given the lack of customers??  WTF?:dunno: What they can't even give their stuff away with style.  Most signs were saying 20% off.

Hey I thought, maybe Dickie is smarter than you think.  He's putting all this low balling out there before Christmas to get a rush happening and making some great sales volumes whilst looking like it's not a sale and   tricking the competition.  Hey smart Dick.  Probably not.  Just a fricken mess more like it.

Anyway, because I was in a big shopping complex I had the opportunity to check em all out.  So I went to Harvey Norman and low and behold, the sales guy in the tech area was really good!  He knew as much as I did and all the little secrets like how fricken awesome the windows phone is compare to an Iphone peace of overpriced rubbish. He new about hard drives that will process faster and lazer printer tech and price of toner vs volume and all the little things that most consumers that shop at these places don't really get.  It was so much better than the Harvey Norman I went to 12 months ago when they were pathetic.  So well done Harvey.  JB are always that good or they will find you a guy who is.  The fridge guy was not so good. I had to do all his figuring out for him, like the volume vs energy rating and stuff to get the best deal.

Maybe customers all bought the stuff from Dickie on line from their work PCs on a boring Monday morning and they had to rip it off the shelves.  I don't know,  Just weird.  Bought a printer off Harvey too for about $150 less than the one I saw a few hours before at Office Works being about 35% off!  Not bad Harvey.


----------



## notting (7 December 2015)

*Re: DSH - Dick Smith Holdings*

I suddenly find a plausible explanation for the above experience. 

It's an inside job!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The tail is wagging the dog! -
http://www.news.com.au/finance/business/retail/angry-shoppers-accuse-dick-smith-staff-of-hoarding-items-during-fire-sale/news-story/24ffe5fc9b91f633c0c7ab8c7a757a9d

Unbelievable.  

"Our dedicated well trained team of sales professionals," as described by CEO recently!

*
No Dick Smith sales person said, "Boo" to me, or even looked me in the eye!*

Dick Heads.


----------



## Knobby22 (8 December 2015)

*Re: DSH - Dick Smith Holdings*

I visited the local Dick Smith store to buy a cat 6 cable and to have a look.
Busier than I have ever seen it. Some stuff was disappearing but overall left unimpressed. couldn't buy the cable so went to JBs and got one.

The foot traffic should be enough to get them reasonable figures for December. It won't last though unless they improve the product.


----------



## So_Cynical (8 December 2015)

*Re: DSH - Dick Smith Holdings*

Have purchased a couple of things over the last few months at DSH, ordered and paid online and then picked up at the store of my choice a day or 2 later after email confirmation that my order was ready to pick up...a pleasant, simple and value for money experience both times.


----------



## sikboy (8 December 2015)

*Re: DSH - Dick Smith Holdings*



So_Cynical said:


> Have purchased a couple of things over the last few months at DSH, ordered and paid online and then picked up at the store of my choice a day or 2 later after email confirmation that my order was ready to pick up...a pleasant, simple and value for money experience both times.




Whatever you bought at DSH, you could of probably bought on eBay for cheaper and deliver to door. 

I went into DSH the other week to get some solder. They dont sell any but they sell soldering irons. I said to the sales guy. "Huh??? How does that work? One doesn't really work without the other" he had no explanation except to tell me to go to Jaycar.


----------



## So_Cynical (8 December 2015)

*Re: DSH - Dick Smith Holdings*



sikboy said:


> Whatever you bought at DSH, you could of probably bought on eBay for cheaper and deliver to door.




No, i don't buy anything without at least a 10 minute google.  got exceptional value for money and easy convenient pick up, and im not Robinson Crusoe, the last purchase took some finding as the sales guy had to sort thru about 100 orders waiting to be picked up.


----------



## Smurf1976 (8 December 2015)

*Re: DSH - Dick Smith Holdings*



sikboy said:


> I went into DSH the other week to get some solder. They dont sell any but they sell soldering irons. I said to the sales guy. "Huh??? How does that work? One doesn't really work without the other" he had no explanation except to tell me to go to Jaycar.




Therein lies the problem. They scrapped the old business over which they had a near monopoly almost completely, any actual electronics of the sort they used to sell seem to be being cleared out and most went years ago, and have failed to successfully start up what is in practice an entirely new business selling appliances in competition with many others.

Jaycar expanded and took virtually all the old Dick Smith customers and Dick Smith has then started from scratch with their new business. There's little if any carryover of customers there and no real brand value either since the business is now _completely_ different. 

At a guess, someone decided that they were only ever going to be a niche retailer with the old business. The market isn't massive and they already dominated so couldn't really grow that much. So they scrapped that and went into something else with the intent of ending up as a major mainstream retailer. The plan didn't work and now they're in trouble with no real chance of going back to the old model - firstly because someone else is now doing that (Jaycar) and second because the brand reputation is wrecked so far as that sort of thing is concerned.

Moral of the story is that if you're going to try something new then get that working _before_ you ditch the successful business you've already got to the point where there's no going back.


----------



## Ves (4 January 2016)

*Re: DSH - Dick Smith Holdings*

I'm assuming that Christmas wasn't kind to Dick Smith Electronics at all.   

Pending announcements on "debt covenants" are never nice.


----------



## McLovin (4 January 2016)

*Re: DSH - Dick Smith Holdings*



Ves said:


> I'm assuming that Christmas wasn't kind to Dick Smith Electronics at all.
> 
> Pending announcements on "debt covenants" are never nice.




From what I've heard, all across retailing margins were razor thin over Christmas. DSH's sale in December has won them no friends in the industry.


----------



## poverty (4 January 2016)

*Re: DSH - Dick Smith Holdings*



McLovin said:


> From what I've heard, all across retailing margins were razor thin over Christmas. DSH's sale in December has won them no friends in the industry.




Gerry Harvey named that the Suicide Sale I think I remember.


----------



## jancha (4 January 2016)

*Re: DSH - Dick Smith Holdings*



poverty said:


> Gerry Harvey named that the Suicide Sale I think I remember.




What else would Gerry say... he's in competition with Dick Smith.
Suicide sale or a last ditch attempt to move old unwanted stock and pay creditors in order to keep operating.
Management a new plan or Dicks finished


----------



## Smurf1976 (4 January 2016)

*Re: DSH - Dick Smith Holdings*

Looks like it's just about over, receivers called in now:

http://www.theaustralian.com.au/bus...h/news-story/795a2e0e890a4627797fe260a5666cfa


----------



## skyQuake (4 January 2016)

*Re: DSH - Dick Smith Holdings*



Smurf1976 said:


> Looks like it's just about over, receivers called in now:
> 
> http://www.theaustralian.com.au/bus...h/news-story/795a2e0e890a4627797fe260a5666cfa




Lets see how Anchorage tries to float their next lemon


----------



## McLovin (5 January 2016)

*Re: DSH - Dick Smith Holdings*



skyQuake said:


> Lets see how Anchorage tries to float their next lemon




I'll bet there's a few lawyers looking over whether there is a case against Anchorage.


----------



## shouldaindex (5 January 2016)

*Re: DSH - Dick Smith Holdings*

That happened fast.

I always find it amusing there's always someone thinking with these stocks it's 5 PE and 12% Dividend, it's a must buy.


----------



## Tom32 (5 January 2016)

*Re: DSH - Dick Smith Holdings*



shouldaindex said:


> That happened fast.
> 
> I always find it amusing there's always someone thinking with these stocks it's 5 PE and 12% Dividend, it's a must buy.




I am definitely a sucker for stocks as you describe. 

Trouble is sometimes they don't have crippling debt with limited stock and public announcements give no indication of the trouble they are in so on the face of it a PE of 5 is a bargain.

I don't expect GFY to have a good day today as private equity has had a hand in it as well. I really cannot see why the market is pricing it on the same level as dick smith. That said I am not convinced enough to double down.


----------



## Bill M (5 January 2016)

*Re: DSH - Dick Smith Holdings*

I am not surprised this has happened. Just last year they opened a small shop in our local mall, they were too small to have all the electronic goods one could ever want. The shop was mostly empty, I went in there 6 times over the last year but couldn't find what I want.

On the other hand we also have a big Harvey Norman Store near the same Mall. I found everything I wanted in there and then some. Then I negotiated all the items I wanted to buy to prices I was more willing to pay. I ended up paying around $2,200 for my electrical goods, with software, with warranty extensions and with other extras. 

Now why on earth would Dick Smith open a small shop in Mall (paying big rent) that sells very little of anything when there is a massive Harvey Norman store just up the road? I thought it was very strange when they opened that shop. Someone up the top wasn't thinking straight.

Don't worry about buying solder, they weren't even selling the soldering irons there. In fact none of the old stuff they use to sell was in there. It was like a mini electronics store with very little product lines, not enough choice. 

I wonder how many more little shops they opened up like this one? A recipe for disaster.


----------



## waterbottle (5 January 2016)

*Re: DSH - Dick Smith Holdings*



Bill M said:


> I am not surprised this has happened. Just last year they opened a small shop in our local mall, they were too small to have all the electronic goods one could ever want. The shop was mostly empty, I went in there 6 times over the last year but couldn't find what I want.
> 
> On the other hand we also have a big Harvey Norman Store near the same Mall. I found everything I wanted in there and then some. Then I negotiated all the items I wanted to buy to prices I was more willing to pay. I ended up paying around $2,200 for my electrical goods, with software, with warranty extensions and with other extras.
> 
> ...




Yes many questions with few answers.

I am working their myself - I'm hoping my pay won't get halted!

Rumours from up-top have been that suppliers have not been providing goods since early Dec. The only stuff we've been receiving are the DSE-made phone accessories. I have found myself in a number of instances where customers have come in wanting an item but I could not sell it because HQ did not stock us with it - instead I could only sell ****ty cables and phone cases 

Oh well


----------



## Bill M (5 January 2016)

*Re: DSH - Dick Smith Holdings*



waterbottle said:


> Yes many questions with few answers.
> 
> I am working their myself - I'm hoping my pay won't get halted!
> 
> ...




Oh man, sorry to hear that. Mate with your skills I don't think you will have too many problems getting another job with the bigger guys. Not a nice position to be in though, hang in there, I hope it works out ok for you.


----------



## McLovin (5 January 2016)

*Re: DSH - Dick Smith Holdings*



waterbottle said:


> Yes many questions with few answers.
> 
> I am working their myself - I'm hoping my pay won't get halted!
> 
> ...




Sorry to hear that waterbottle, hope everything works out OK.


----------



## Ves (5 January 2016)

*Re: DSH - Dick Smith Holdings*



McLovin said:


> Sorry to hear that waterbottle, hope everything works out OK.



+1

Easy to forget that it's not all about the investors when you're on an investment forum.


----------



## CanOz (5 January 2016)

*Re: DSH - Dick Smith Holdings*

Agree Waterbottle, hope this works out for you and all the employees. Sometimes management can be such jerks, how can they stuff up a good company so badly....greed.


----------



## Toyota Lexcen (5 January 2016)

*Re: DSH - Dick Smith Holdings*

yeah management got a lot on their shoulders

I went in to store when they announced big sale as after a new phone, it was just junk they trying to sell, nothing of substance

went to officeworks


----------



## Atari rose (5 January 2016)

*Re: DSH - Dick Smith Holdings*

well thats a wrap as they say.

http://www.gemcapital.com.au/blog/i...reatest-private-equity-heist-of-all-time.html


----------



## CanOz (5 January 2016)

*Re: DSH - Dick Smith Holdings*



Toyota Lexcen said:


> yeah management got a lot on their shoulders
> 
> I went in to store when they announced big sale as after a new phone, it was just junk they trying to sell, nothing of substance
> 
> went to officeworks




Sounds like it was just a liquidation sale, but it was not advertised that way, was it?


----------



## notting (5 January 2016)

*Re: DSH - Dick Smith Holdings*

I've been doing the rounds again.  JB is Pumping, Harvey is trying but still too overpriced and they screwed up my fridge delivery so I got a refund.  Went into poor Dick. The staff looked happy enough but when I started talking about how it had got into administration.  The guy looked pretty heart broken.  Poor thing. I asked if his store was profitable cause if it was he'd probably be OK but he said he couldn't comment.  
It was one of the better Dick stores I know of.
I do most of my shopping online these stores are just so far from competitive apart from the deal when they are culling a TV line or something to make way for a new thing. There is even a Kogan store with pretty good deals, Checked them out - amazing.


----------



## CanOz (5 January 2016)

*Re: DSH - Dick Smith Holdings*



notting said:


> I've been doing the rounds again.  JB is Pumping, Harvey is trying but still too overpriced and they screwed up my fridge delivery so I got a refund.  Went into poor Dick. The staff looked happy enough but when I started talking about how it had got into administration.  The guy looked pretty heart broken.  Poor thing. I asked if his store was profitable cause if it was he'd probably be OK but he said he couldn't comment.
> It was one of the better Dick stores I know of.
> I do so most of my shopping online these stores are just so far from competitive apart from the deal when they are culling a TV line or something to make way for a new thing. There is even a Kogan store with pretty good deals, Checked them out - amazing.




Makes you wonder what all the shop fronts are going to look like as more and more people shop online. This is one of the great disruptors of our time i reckon. A slow bleed to death for retailers. I guess w could have more restaurants, bars and cafes...


----------



## notting (5 January 2016)

*Re: DSH - Dick Smith Holdings*



CanOz said:


> Sounds like it was just a liquidation sale, but it was not advertised that way, was it?




Seriously there was nothing worth buying.  It had all been lifted by the staff.  They probably selling it on Ebay.


----------



## notting (5 January 2016)

*Re: DSH - Dick Smith Holdings*



CanOz said:


> Makes you wonder what all the shop fronts are going to look like as more and more people shop online. This is one of the great disruptors of our time i reckon. A slow bleed to death for retailers. I guess w could have more restaurants, bars and cafes...




Yeah there's a lot a cool coffee shops and innovative eateries opening up which is for us all, I guess whilst the robots do all the work!


----------



## Bill M (5 January 2016)

*Re: DSH - Dick Smith Holdings*

The only thing the online retailers need to get right is the warranty of the product. Sometimes those grey imports do not get covered by warranty. Imagine buying a Samsung S6 for $900 and then when it breaks down and you take it to Samsung and they say sorry, this is an online product from a grey import company and we can not service that unit. I've heard of it happening.

I play the other game, print it out or screen shot the item off another companies website on my smartphone and ask the bricks and mortar mobs if they can match it. 9 times out of 10 they do, the other one time I take the risk. On my last recent buy at Harvey Norman they matched everything I threw at them, they had to really as I was buying a high end PC and they new I would walk if they didn't.

The good thing with the shops is when you go back there with your item and it's covered under warranty they will take care of you without too much fuss.

Sorry, it's a bit off topic but that's what retailers and online suppliers are up against. I love my toys....


----------



## Smurf1976 (5 January 2016)

*Re: DSH - Dick Smith Holdings*



waterbottle said:


> I am working their myself - I'm hoping my pay won't get halted!




Sorry to hear that and I hope it works out OK for you in due course.

I've read that whatever happens from once the administrators take over is their responsibility. So you should get paid for today and ongoing work for however long that lasts.

As for any work you have done prior to yesterday but not yet been paid for, that's more questionable. Leave entitlements etc would be even more doubtful (and quite possibly end up worthless if the company does go bust).

I'm not wanting to be negative there on something that affects you personally, just suggesting the old "plan for the worst, hope for the best" approach would be wise.


----------



## nulla nulla (5 January 2016)

*Re: DSH - Dick Smith Holdings*



Smurf1976 said:


> Sorry to hear that and I hope it works out OK for you in due course.
> 
> I've read that whatever happens from once the administrators take over is their responsibility. So you should get paid for today and ongoing work for however long that lasts.
> 
> ...




Employees are a preference creditor. The Administrator/liquidator will determine from the payroll records who is entitled to what and organize a payment via "gears". If there is a shortfall from available company funds, the government guarantees the employee payout and then stands in the administration for the extent of the guaranteed funds. If you are an employee, you should make the effort to attend any meetings called by the administrator/liquidator. Keep the pressure on them to pay you out in a timely manner.


----------



## banco (5 January 2016)

*Re: DSH - Dick Smith Holdings*

Wonder how long this will stay up for:

http://www.anchoragecapital.com.au/case-study-dick-smith


----------



## luutzu (5 January 2016)

*Re: DSH - Dick Smith Holdings*



banco said:


> Wonder how long this will stay up for:
> 
> http://www.anchoragecapital.com.au/case-study-dick-smith




woah! Bought for $20M, offload to mums and dads and sophisticated fund managers two years later for $520M and still own 20% until chasing out a year before total collapse. Fark.


----------



## Tom32 (6 January 2016)

*Re: DSH - Dick Smith Holdings*



banco said:


> Wonder how long this will stay up for:
> 
> http://www.anchoragecapital.com.au/case-study-dick-smith




Apparently (at inventory management) it was the clearing of old and obsolete stock at written down stock values that increased their PE ratio. They only describe the former not the latter obviously.

Because our entire accounting system / law is geared around preventing writing down profits inflating profits In the short term by saying stock write down all obsolete and selling for big margins against written down value isn't going to fall foul of the Aus gov. After all apart from the private equity outfit the o let other winner was the ato in the year they deliberately wrote up their profits. Though prob they didn't even win because it would have been written back in the year before which formed their turnaround story.


----------



## waterbottle (6 January 2016)

*Re: DSH - Dick Smith Holdings*

Thanks for the support everyone!

I will be okay, but many of my colleagues won't be having been caught off-guard immediately after the Christmas/New Year's period. 

Seems as though we were having problems for a while with suppliers refusing to provide new stock since early Dec - all we received were DSH branded products and the odd name-brand (probably old stock from distribution). 
The goal is to apparently sell the business but it's not clear who would be the buyer (if any?).
My guess would be JBH or HVN, having said that our competitors are usually located in the same markets as we are so unless they are looking for excess crappy stock and more floor space I can't see why they would bother!


----------



## oldblue (7 January 2016)

*Re: DSH - Dick Smith Holdings*

Perhaps if the price is cheap enough a competitor might buy, take the good bits and close the rest down. A sort of preventative strike against anyone making a new, viable competitor.


----------



## pinkboy (7 January 2016)

*Re: DSH - Dick Smith Holdings*



oldblue said:


> Perhaps if the price is cheap enough a competitor might buy, take the good bits and close the rest down. A sort of preventative strike against anyone making a new, viable competitor.




Perhaps Anchorage might take it on again? 


pinkboy


----------



## Smurf1976 (7 January 2016)

*Re: DSH - Dick Smith Holdings*

Went into a Dick Smith store today for the first time in years.

Spotted that they still had Christmas lights on sale so took a look (already got 25,000 so may as well have some more).

Couldn't believe the prices they were asking! $80 on the 7th of January for what others would have had for $60 in December and would have dropped to no more than $45 on Boxing Day to clear unsold stock.

Now I know why they're struggling to get people buying things. Charging full price, and a rather high price at that, for stock that is now out of season and won't likely find a buyer until November (if they're still around at that point).


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## Macquack (7 January 2016)

*Re: DSH - Dick Smith Holdings*

*Dick Smith customers left out of pocket on undelivered goods, lost deposits and gift cards*



> Dick Smith (the founder) has issued a spray at the private equity firm that floated the electronics store he founded, which is now in voluntary administration.
> 
> The outspoken entrepreneur said the previous owner, Anchorage Capital Partners, had “*a lot of explaining to do*” over its $520 million IPO, which he argued was drastically overvalued.
> 
> ...




You are dead right Dick Smith, these capitalist pigs (Anchorage Capital) should be hung drawn and quartered. Not only did they fraudulently alter the books of Dick Smith Electronics to dress up a piece of mutton to appear as lamb, and swindle shareholders out of a cool $500 million. But, they are now also responsible for duding the customers out of their gift card moneys, deposits on products and undelivered (never to be delivered) items.

http://www.news.com.au/finance/busi...s/news-story/9ac8c747337216347be7e81e24b90155
*
Dick Smith is the Greatest Private Equity Heist of All Time*
https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time/


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## skc (7 January 2016)

*Re: DSH - Dick Smith Holdings*



Macquack said:


> Not only did they fraudulently alter the books of Dick Smith Electronics to dress up a piece of mutton to appear as lamb




Yes they dressed it up. No, not fraudulently.



Macquack said:


> , and swindle shareholders out of a cool $500 million.




No. Anchorage made a lot of money for it's own shareholders. Investors buying into DSH failed to do their own research properly. It's a zero sum game.



Macquack said:


> But, they are now also responsible for duding the customers out of their gift card moneys, deposits on products and undelivered (never to be delivered) items.




Not really. They are probably just acting in accordance to the Corporation Act in relation to the administration process.


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## luutzu (7 January 2016)

*Re: DSH - Dick Smith Holdings*



Macquack said:


> *Dick Smith customers left out of pocket on undelivered goods, lost deposits and gift cards*
> 
> 
> 
> ...





I bet you there's a few who's calling up Anchorage since to ask them to invest their money for them.


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## Parse (8 January 2016)

*Re: DSH - Dick Smith Holdings*

What happens with the short sellers? I imagine DSH had a fair bit of short trading going on, so do these guys now just walk away laughing all the way to the bank with a 100% profit? Considering the shares now will never be returned and if they were, they are worthless anyway.


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## skc (8 January 2016)

*Re: DSH - Dick Smith Holdings*



Parse said:


> What happens with the short sellers? I imagine DSH had a fair bit of short trading going on, so do these guys now just walk away laughing all the way to the bank with a 100% profit? Considering the shares now will never be returned and if they were, they are worthless anyway.




If and when the administrator declares that DSH equity to be worthless, the short holders will be able to close their position with an exit price of $0. 

However, this process could take some time, so some short holders might choose to cover their shorts if they think the end is nigh. It's better to lock in 90% profit and release the capital, then to be locked up for 12 months chasing that last 10%. I suspect this is why you sometimes see an incredible, unexplained and high volume jump in the share price of a company very shortly before it's death.


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## poverty (8 January 2016)

*Re: DSH - Dick Smith Holdings*



skc said:


> If and when the administrator declares that DSH equity to be worthless, the short holders will be able to close their position with an exit price of $0.
> 
> However, this process could take some time, so some short holders might choose to cover their shorts if they think the end is nigh. It's better to lock in 90% profit and release the capital, then to be locked up for 12 months chasing that last 10%. I suspect this is why you sometimes see an incredible, unexplained and high volume jump in the share price of a company very shortly before it's death.




But how do they close it if the shares are not being traded?


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## skc (8 January 2016)

*Re: DSH - Dick Smith Holdings*



poverty said:


> But how do they close it if the shares are not being traded?




Eventually the prime broker who lent the share will mark them zero. So there's is no longer the obligation to return the borrow. When you short sell a stock... you have already received the cash (i.e. the sale proceeds). So in essence you keep the proceeds and there is no other obligation against the position.

The process with a CFD provider is probably even simpler... they will just close it @ $0.


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## Macquack (9 January 2016)

*Re: DSH - Dick Smith Holdings*

Just doing some light reading of the Dick Smith Holdings (DSH) Prospectus. Fair dinkum, is this the typical  “smoke and mirrors”  Prospectus or am I  not up to speed, because I could not make "head nor tail" of any of it. The only thing I noted was the "Joint Lead Managers" were the usual f***ing suspects in “*Goldman Sucks*” and “*Macquarie Blood Bank”.*

From the DSH Prospectus (*with my additions*)


> What are the *key risks for Dick Smith*
> “Also, the sale of Shares in the future by Anchorage (*read - highway robbers*) could adversely affect the market price of the shares (*read - they will plummet to zero*).




DSH would have to be a great example of why Joe Public are scared witless of the stock market.


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## shouldaindex (10 January 2016)

*Re: DSH - Dick Smith Holdings*

That's always written as a risk in prospectus.

People have a way of seeing what they want, if they imagine themselves making money, they're more likely to ignore any information that threatens that image.

Dick Smith himself was on TV last week saying he felt sorry for customers, but not for shareholders as they should have known the risks based on known information such as the quadrupling of value in a short time.

But regardless as we've seen with a few different companies, if you hold them less than a year's average returns (EG. less than 7% of your investments) it only sets you back about a year.


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## banco (10 January 2016)

*Re: DSH - Dick Smith Holdings*

Has there been an IPO from a private equity firm on the ASX that has been successful in the medium term? I suppose if the POS they are selling has a notional value that puts it in the ASX 200 the index funds have to buy it.


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## skc (10 January 2016)

*Re: DSH - Dick Smith Holdings*



banco said:


> Has there been an IPO from a private equity firm on the ASX that has been successful in the medium term? I suppose if the POS they are selling has a notional value that puts it in the ASX 200 the index funds have to buy it.




Quite a lot actually. 

Take a look at the following link and you will see a host of reports about PE IPO performance
https://www.avcal.com.au/stats-research/special-reports

AVCAL is an industry body so keep in mind they have a vested interest in making the numbers look good. It doesn't mean they will lie about the data but they could choose the timing of comparison. So read through an older report to see how those companies fared over the longer term.

DSH, MYR are household names so it's easy to relate to. But other more successful household names like JB HiFi have been consistently successful for some time, and certainly can't blame the PE owner should they fail now.


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## Tyler Durden (25 February 2016)

*Re: DSH - Dick Smith Holdings*

The end of Dick Smith.

http://www.news.com.au/finance/busi...s/news-story/4c0c9122f24d9ba6db04ddf40880037c


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## Tyler Durden (4 March 2016)

*Re: DSH - Dick Smith Holdings*

Are people talking about this elsewhere? Seems awfully quiet for something so big...


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## McLovin (5 March 2016)

*Re: DSH - Dick Smith Holdings*



Tyler Durden said:


> Are people talking about this elsewhere? Seems awfully quiet for something so big...




What else is there to say? It's toast. 

Pretty busy time of the year too, given it's reporting season.


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## stewiegriffin (5 March 2016)

*Re: DSH - Dick Smith Holdings*



skc said:


> Quite a lot actually.
> 
> Take a look at the following link and you will see a host of reports about PE IPO performance
> https://www.avcal.com.au/stats-research/special-reports
> ...




It really also depend on _when_ during the IPO cycle these companies are listed. Typically, at the height of the IPO cycle the equity markets will buy anything (and at massive valuations) - and this of course means poor performance going forward and all kinds of junks being flogged. You can't blame the seller for price maximisation!


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## System (23 June 2016)

On June 23rd, 2016, Dick Smith Holdings changed its name to DSHE Holdings.


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## McLovin (15 July 2016)

The booking of rebates is emerging as one of the chief causes of the DSH collapse. Rebates are a pretty opaque part of retailing but they have pretty big impact on the bottom line. In DSH instance it was, according to the receiver, booking rebates through the P&L instead of as a reduction to COGS. The effect being that it encouraged a big build up in inventory because volume based rebates were booked as profit immediately, but then the stock sat there. It also adds another angle to the Forager article about the big run up in inventory. The rebates were turning an unprofitable business into a profitable one.



> His concerns echoed those of Dick Smith's receivers at Ferrier Hodgson, which has alleged managers bought unsuitable stock to generate extra rebates and booked rebates to the profit and loss account rather than against the inventory account, in breach of accounting standards.




The effect on the P&L is stark.


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## Ves (15 July 2016)

McLovin said:


> The booking of rebates is emerging as one of the chief causes of the DSH collapse. Rebates are a pretty opaque part of retailing but they have pretty big impact on the bottom line. In DSH instance it was, according to the receiver, booking rebates through the P&L instead of as a reduction to COGS. The effect being that it encouraged a big build up in inventory because volume based rebates were booked as profit immediately, but then the stock sat there. It also adds another angle to the Forager article about the big run up in inventory. The rebates were turning an unprofitable business into a profitable one.
> 
> 
> 
> The effect on the P&L is stark.



Thanks for this mate.

I did a search on the 2015 Annual Report and the word "rebate" only appears once.

It's in the note relating to how they value inventory (ie.  total cost less applicable rebates). Which is not exactly helpful in this case.

If there's no note in the accounts,  do you know if it was possible to pick up the fact that they were running it through the revenue line rather than COGS?   Which obviously vastly overstates the profit in cases where the inventory you're not selling doesn't even make it to the COGS line.

I would have thought they'd be required to include this practice in the Notes.


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## McLovin (15 July 2016)

Ves said:


> Thanks for this mate.
> 
> I did a search on the 2015 Annual Report and the word "rebate" only appears once.
> 
> It's in the note relating to how they value inventory (ie.  total cost less applicable rebates). Which is not exactly helpful in this case.




It's not only unhelpful, but if the receiver is correct it was also untrue.



Ves said:


> If there's no note in the accounts,  do you know if it was possible to pick up the fact that they were running it through the revenue line rather than COGS?   Which obviously vastly overstates the profit in cases where the inventory you're not selling doesn't even make it to the COGS line.
> 
> I would have thought they'd be required to include this practice in the Notes.




I think that's a really tough ask. Easy after the fact when the forensic accountants have gone through the books, but as an outsider very tough indeed. I guess you have to ask, do you need to know they're running rebates through the P&L? What we did know was that cashflow was very weak, and inventory was rising rapidly. It now appears we can answer with a bit more clarity the reason those two factors were occurring. But as an investor you wouldn't have touched it with a barge pole anyway.

If it's not permitted by the accounting standard, they probably didn't want to disclose they were doing it.


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## Ves (15 July 2016)

McLovin said:


> But as an investor you wouldn't have touched it with a barge pole anyway.



Looking back at my posts in this thread,  there was a sense that something was "wrong",  but indeed,  fairly hard to say what it was as an outsider at the time,  but enough of a red flag to not touch it.  Looking around the various forums, clearly the "fat yield" was enough of a market siren to see quite a few retail investors burnt though as the knife kept falling.



> If it's not permitted by the accounting standard, they probably didn't want to disclose they were doing it.



So where's ASIC?  I thought the Libs had cashed them up.


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## skc (15 July 2016)

McLovin said:


> I think that's a really tough ask. Easy after the fact when the forensic accountants have gone through the books, but as an outsider very tough indeed. I guess you have to ask, do you need to know they're running rebates through the P&L? What we did know was that cashflow was very weak, and inventory was rising rapidly. It now appears we can answer with a bit more clarity the reason those two factors were occurring. But as an investor you wouldn't have touched it with a barge pole anyway.




I remember reading commentary around the time how DSH managers focused on rebates and made wrong purchasing decisions. I didn't connect to the fact that it would also mean the P&L are dodgy.

It's clear that some analysts / fund managers knew about the rebate game on the first profit downgrade. They were able to connect the dots pretty quickly that something has been booked up front and costs were capitalised and hiding in the balance sheet. 

I can see why listed companies would want to play this kind of game. The market tend to ignore (or punish less severely) writedowns... especially if the company but in bold "*non-cash and one-off*". But in most circumstances, these are conscious management mistakes in the past (which were paid for by CASH!) that didn't become obvious until later.

I wish I can do that in my trading. Book profits along the way, then put all losing positions onto the balance sheet. Then every 2 periods I will do a non-cash write off on the inventory... my reported profits would be thru the roof!


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## Dividend (25 October 2017)

does anyone has the company prospectus from its IPO in 2013? Will pay $ for the document as I need it for a case study, I can't find it anywhere on the internet.


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## VSntchr (25 October 2017)

Dividend said:


> does anyone has the company prospectus from its IPO in 2013? Will pay $ for the document as I need it for a case study, I can't find it anywhere on the internet.



Here is the link


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