Wearables, mobile and own brands are big winners at newly transformed retailer
PS4, Xbox One, iPhone, iPad and Samsung gear all drove Dick Smith sales, pushing H1 profits to $25 million, it announced today.
Wearable tech like the GoPro camera, a big seller in Move stores, and FitBit wrist bands were also popular in the half year to December 29, for the rapidly expanding Dick Smith, pushing sales to $637m.
Dick Smith H1 profits also hit above target at $25m or 63% of full year target.
Shares fell -0.93% to $ 2.12 after the better than expected results was announced for the once boring retailer, who under new owners, Anchorage Capital, transformed stores to hip and cool places to be
In the past year CEO Nick Abboud and his retail team developed product line ups, adding new brands and grew the store networks to 369, including Move ‘fashtronics’ retailer and entered David Jones, operating its electronics departments.
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Mobility, office and accessories were big winners for the retailer in H1 and store-in-store concept Dick Smith developed for Apple, Samsung and Sony gear also drove sales, according to a company investor presentation, released today.
DS launched mobile solutions including post-paid plans on the three main networks and a satellite operator in the half year, with take up “encouraging.”
There was also significant uplift of gross margin by 160 bps since FY13 and now stands at 25.3%, thanks to a focus on higher margin own brand, global brands and products with better returns than under previous owners, Woolworths.
The retailer has launched a major drive on Dick Smith’s own brand which accounts for 11% of total sales and gross margins jumped by 50bps.
It plans to launch a tranche of new own label products this year and aims to have 15% of total sales to be own brand products, over time.
The newly opened Move fashtronics store located in Bondi Junction is “meeting expectations” and Dick Smith plans to open three new locations by end of financial year 2014.
It is now focusing on four pillars – mobility, omni channel, own brand and new stores, and plans to have 376 locations by FY 14.
In total it will open 22 new locations this financial year, including seven in H2.
Online sales now account for 3.3% of total sales – higher than JB Hi-Fi or Harvey Norman, ‘click and collect’ rose 50% and accounts for one in three online transactions.
It has online portal in 17 bricks and mortar stores and reported strong take up of mobile apps.
Although DS said transformation of Australia operation is complete, the transformation of NZ operation is just underway with a 26% fall in like for like sales but said gross margin was improving.
As CN reported earlier this month, the retailer recently closed its NZ supply office, and moved it back to Australia, which it said was a bid to to “simplify and improve” go to market proposition and improve operational efficiencies, but insists 61 stores remain intact.