By Petrina Berry
(Australian Associated Press)
Dick Smith chief executive Nick Abboud has quit as potential buyers begin to circle around the insolvent electronics retailer.
A week after the retail chain went into receivership with debts of about $390 million, the business has been advertised for sale on Tuesday.
Receivers say about 40 initial expressions of interest have already been made.
Analysts are predicting suitors would likely pick the company apart for the good bits, like one would do to an outdated computer, rather than take on the business in its entirety.
“The vultures are hovering around the carcass now and who comes away with what is of most interest now,” optionsXpress market analyst Ben Le Brun said.
“The New Zealand part of the business potentially represents the most value to interested buyers.”
IG market strategist Evan Lucas said JB Hi-Fi may be an interested buyer given the electronics retailer has wanted to expand into New Zealand.
“It is unlikely that the chain will be bought as one and more likely that it will be broken up with the better performing stores sold off with some of the monies recouped that way,” he said.
“It would make sense if JB Hi-Fi showed interest in the NZ part of the business.”
He said Dick Smith’s New Zealand business had a better brand structure and better store locations than its Australian arm.
JB Hi-Fi declined to comment.
Gerry Harvey, founder of electronics and furniture retailer Harvey Norman, said his company had no interest in the Dick Smith chain.
“If you gave me a hundred million I still wouldn’t touch it,” Mr Harvey told AAP.
“It is a poisoned chalice.”
Dick Smith owes secured creditors about $140 million and unsecured creditors, which includes customers with unredeemed gift cards, another $250 million.
The 48-year-old company has 393 stores across Australia and New Zealand under four brands, Dick Smith, Electronics powered by Dick Smith, Move, and Move by Dick Smith.
Nick Abboud was chief executive of Dick Smith since November 2012 after private equity firm Anchorage Capital Partners bought the ailing business from Woolworths and relisted it on the share market the following year.
Former chief executive of Retail Fusion Brands and Dymocks, Don Grover, has been appointed interim chief executive as receiver Ferrier Hodgson tries to restructure and sell the business.
The stock last traded at 35.5 cents on the ASX, having tumbled 84 per cent from the $2.20 a share Anchorage Capital sold it for in its initial public offering in 2013.
JB Hi-Fi’s share price has received a strong boost from the demise of a rival.
Its shares overcame an overall weaker market to rise 35 cents to $20.86 while Harvey Norman fell five cents to $4.17.