Dick Smith For Sale?
|Dick Smith owners Anchorage Capital has approached Goldman Sachs and Macquarie Capital about possible sale options – less than one year after it purchased from Woolworths, reports AFR.
An Initial Public Offering would value the Dick Smith operation at $550-$620 million.
Anchorage which has turned around the retailer, has just announced a slew of new store openings with plans to open over 70 in total, in a bid to reassert its position as a leading tech retailer.
Anchorage Capital Partners released a statement last week, saying:
“Dick Smith’s turnaround strategy has been implemented very successfully and the business is now pursuing organic growth options such as the David Jones Retail Brand Agreement, the launch of post-paid mobile phone plans, its new store format, opening new stores and other initiatives.
“Anchorage is a turnaround-focused investment firm, so given the business is now pursuing a growth agenda and following interest from the investment community, we have commenced working with advisors to evaluate potential options.”
Anchorage won’t be saying any more at this stage, a spokesperson told CN.
CEO Nick Abouud laughed off the idea Dick Smith was back up for sale when it was put to him at the opening of flagship store in Sydney CBD back in August, admitting, “we’ve got a lot of work to do”.
“We’re a powerful business” he said. DS expansion plans will push store count to 400.
Abouud and the Anchorage team have turned around the ex-Woolies owned operation, refreshing product offerings including full mobile phone pre and post pay offering, with a new retail strategy including Apple, Samsung and Sony “store-in-stores” and glossier, sexier stores.
In the last eight months, Anchorage has grown Dick Smith turnover to a $1.3 bn business, with no core debt and “we don’t pay dividends” according to CEO Abouud.
“We made fairly decent profit in the past 12 months” he said with plenty cash in the bank.
“Our ambition is to be the most profitable retailer per dollar sold.”
|Anchorage has said it is “confident in the long term success of the [Dick Smith] business”.
According to group principal Phil Cave “all the directors are committed for the long term” including CEO Abouud.
Cave is also tipped to remain as chairman following a potential IPO.
“Dick Smith is an ideal fit for our investment mandate of acquiring established businesses with strong brands that can benefit from Anchorage’s proprietary approach to operational performance improvement” Anchorage said last September as it finalised the buyout from Woolworths.