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How did that compare to the current Jaycar/Altronics/etc offerings? I imagine a sleeping zombie

by lmpdev 3y ago

glaucon 3y ago
Up until, say, 2005 they were pretty similar to current Jaycar but, I think perhaps after an acquisition, they started selling branded audio/computers etc and the geeky stuff gradually became less prominent. At some point they got bought by Australian Woolworths. The shops began to look more like mainstream "electronics" shops than Jaycar does now. Then the whole lot came tumbling down. The DS name and domain got sold off to a third party but the bricks and mortar just disappeared. When they went down the gurgler all the outstanding gift cards went with them (at least in NZ, Ozzie might have had better legislation), worth remembering that a branded gift card is an unsecured loan.
- aragilar 3y ago
  No, was bad in AU too, see https://www.abc.net.au/news/2016-01-05/dick-smith-enters-voluntary-administration/7067798 https://www.abc.net.au/news/2016-01-05/dick-smith-enters-vol... and https://www.abc.net.au/news/2016-01-05/dick-smith-receivers-vouchers-deposits-non-refundable/7068268 https://www.abc.net.au/news/2016-01-05/dick-smith-receivers-....
  - glaucon 3y ago
    Thanks for the references. I had forgotten the sale from Woolworths to a Private Equity group. I'm sorry this is bit off topic but I do think the description, within https://www.abc.net.au/news/2016-01-05/dick-smith-enters-voluntary-administration/7067798 https://www.abc.net.au/news/2016-01-05/dick-smith-enters-vol... , of what took place in the brief period between when the Private Equity group bought Dick Smith and when they floated it is well worth reading. FWIW my experience of seeing this stuff happens is it only works where you have a company that non-institutional investors think they know and understand. In the case of Dick Smith it was a well liked and very visible brand within Australia. If the same financial engineering had been done to some obscure industrial group the Private Equity group would have had to rely on selling the shares to institutions and they would have been much more aware of what they were buying. Here's the segment from the ABC piece ... Private equity group Anchorage Capital bought Dick Smith from Woolworths in 2012 for an initial payment of just $20m. Anchorage then "dressed the company up to look good for just one thing - to persuade people to buy shares," according to analysts from Forager Funds Management. Anchorage "wrote down the value of the inventory, took provisions for future onerous lease payments, wrote down the value of the plant and equipment and liquidated a lot of the inventory as quickly as they possibly could to throw off cash," according to Forager's Steve Johnson. The cash was then used by Anchorage to effectively make Dick Smith 'buy itself'. The writedowns inflated profits, a key factor in enticing investors into the company. For example: a stock item that may have been bought for $100 may have been in the books at $60 after the writedowns, which meant an extra $40 profit on every sale. The writedown of plant and equipment lowered depreciation charges, also boosting the bottom line. "But when they liquidated all that inventory to pay for the purchase price, they didn't replace it," according to Forager's Steve Johnson. "And the new owners of the business, since it's been listed on the stock market, have had to put in a lot more money to fund the increase in inventory."
- ssss11 3y ago
  In Aus the Kogan acquisition was their tombstone. Dick Smith who started the company was a legend, it’s a shame. Jaycar is the best electronics retailer we have now.
  - lastyearmodel 3y ago
    I'd probably only correct that Jaycar is the best brick and mortar electronics retailer we have now.
bentpins 3y ago
I have fond memories of Dick Smith. My dad bought my first soldering iron, along with some soldering projects (I remember the FM Wireless Microphone from here https://ia801002.us.archive.org/3/items/dicksmithsfunwayintoelectronicsvolume2/Dick%20Smith%27s%20Funway%20into%20Electronics%20Volume%202_text.pdf https://ia801002.us.archive.org/3/items/dicksmithsfunwayinto... ). You could tell the people creating the kits were really keen to share their love of electronics. You could buy loose components out of trays, and it seemed like they had a bunch more unusual adapters and gadgets that wouldn't interest a typical consumer. But they gradually became just a retailer for big brand items.
- cjak 3y ago
  The Dick Smith Funway books were a gateway drug for this primary school nerd. They were so simple even a parent could participate. https://archive.org/details/dicksmithsfunwayintoelectronicsvolume2/Dick%20Smith%27s%20Funway%20into%20Electronics%20Volume%201/ https://archive.org/details/dicksmithsfunwayintoelectronicsv...

How did that compare to the current Jaycar/Altronics/etc offerings? I imagine a sleeping zombie

by lmpdev 3y ago

How did that compare to the current Jaycar/Altronics/etc offerings? I imagine a sleeping zombie

Up until, say, 2005 they were pretty similar to current Jaycar but, I think perhaps after an acquisition, they started selling branded audio/computers etc and the geeky stuff gradually became less prominent. At some point they got bought by Australian Woolworths. The shops began to look more like mainstream "electronics" shops than Jaycar does now. Then the whole lot came tumbling down. The DS name and domain got sold off to a third party but the bricks and mortar just disappeared. When they went down the gurgler all the outstanding gift cards went with them (at least in NZ, Ozzie might have had better legislation), worth remembering that a branded gift card is an unsecured loan.

aragilar 3y ago
No, was bad in AU too, see https://www.abc.net.au/news/2016-01-05/dick-smith-enters-voluntary-administration/7067798 https://www.abc.net.au/news/2016-01-05/dick-smith-enters-vol... and https://www.abc.net.au/news/2016-01-05/dick-smith-receivers-vouchers-deposits-non-refundable/7068268 https://www.abc.net.au/news/2016-01-05/dick-smith-receivers-....
- glaucon 3y ago
  Thanks for the references. I had forgotten the sale from Woolworths to a Private Equity group. I'm sorry this is bit off topic but I do think the description, within https://www.abc.net.au/news/2016-01-05/dick-smith-enters-voluntary-administration/7067798 https://www.abc.net.au/news/2016-01-05/dick-smith-enters-vol... , of what took place in the brief period between when the Private Equity group bought Dick Smith and when they floated it is well worth reading. FWIW my experience of seeing this stuff happens is it only works where you have a company that non-institutional investors think they know and understand. In the case of Dick Smith it was a well liked and very visible brand within Australia. If the same financial engineering had been done to some obscure industrial group the Private Equity group would have had to rely on selling the shares to institutions and they would have been much more aware of what they were buying. Here's the segment from the ABC piece ... Private equity group Anchorage Capital bought Dick Smith from Woolworths in 2012 for an initial payment of just $20m. Anchorage then "dressed the company up to look good for just one thing - to persuade people to buy shares," according to analysts from Forager Funds Management. Anchorage "wrote down the value of the inventory, took provisions for future onerous lease payments, wrote down the value of the plant and equipment and liquidated a lot of the inventory as quickly as they possibly could to throw off cash," according to Forager's Steve Johnson. The cash was then used by Anchorage to effectively make Dick Smith 'buy itself'. The writedowns inflated profits, a key factor in enticing investors into the company. For example: a stock item that may have been bought for $100 may have been in the books at $60 after the writedowns, which meant an extra $40 profit on every sale. The writedown of plant and equipment lowered depreciation charges, also boosting the bottom line. "But when they liquidated all that inventory to pay for the purchase price, they didn't replace it," according to Forager's Steve Johnson. "And the new owners of the business, since it's been listed on the stock market, have had to put in a lot more money to fund the increase in inventory."
ssss11 3y ago
In Aus the Kogan acquisition was their tombstone. Dick Smith who started the company was a legend, it’s a shame. Jaycar is the best electronics retailer we have now.
- lastyearmodel 3y ago
  I'd probably only correct that Jaycar is the best brick and mortar electronics retailer we have now.

bentpins 3y ago

I have fond memories of Dick Smith. My dad bought my first soldering iron, along with some soldering projects (I remember the FM Wireless Microphone from here https://ia801002.us.archive.org/3/items/dicksmithsfunwayintoelectronicsvolume2/Dick%20Smith%27s%20Funway%20into%20Electronics%20Volume%202_text.pdf https://ia801002.us.archive.org/3/items/dicksmithsfunwayinto... ). You could tell the people creating the kits were really keen to share their love of electronics. You could buy loose components out of trays, and it seemed like they had a bunch more unusual adapters and gadgets that wouldn't interest a typical consumer. But they gradually became just a retailer for big brand items.

cjak 3y ago
The Dick Smith Funway books were a gateway drug for this primary school nerd. They were so simple even a parent could participate. https://archive.org/details/dicksmithsfunwayintoelectronicsvolume2/Dick%20Smith%27s%20Funway%20into%20Electronics%20Volume%201/ https://archive.org/details/dicksmithsfunwayintoelectronicsv...