UPDATED: Woolworths has denied that the Dick Smith chain of retail stores has been sold to Australian investment fund Ironbridge; however, they have not denied that a local Australian Company has purchased the consumer electronics retail chain.An announcement as to who has purchased the Woolworths owned chain is set to be made next week according to Woolworths sources.
ChannelNews has not been able to get a confirmation from Ironbridge.
A Woolworths source said today that the retail has been sold and that “It is a local Australian buyer”. An announcement is tipped for Monday.
Earlier this year Woolworths put the consumer electronics retail chain up for sale citing poor performance and a lack of “return on investment.”
Ironbridge advice funds invest in private equity investment opportunities with an enterprise value of between A$100 million and A$500 million.
Recently Dick Smith general manager Debra Singh announced her resignation from the retailer; Singh will leave the Company on August the 17th.
This year Singh has overseen the closure of another 27 stores, taking the total number of stores closed over the last year to 52.
Last week the Financial Review tipped that Private equity firm Anchorage Capital or a syndicate led by former Woolworths chief financial officer, Bill Wavish, were considered to be the most likely buyers, but some industry players believe the sale price would fall well short of initial estimates.
However, double-digit deflation, widespread industry discounting, online competition and subdued consumer demand took their toll on earnings and returns.
During Singh’s tenure with the Company, sales rose from $1.28 billion in 2007 to $1.53 billion in 2011, but earnings before interest and tax fell from $71.1 million to $22 million.
Dick Smith was a surprisingly strong performer in the June quarter of 2012, lifting total sales by 10.4 per cent to $341 million and same-store sales in Australia by 15.4 per cent.
Analysts believe the sales surge was triggered by aggressive discounting aimed at clearing store stock and reducing inventories ahead of divestment.
