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Woolworths to close 100 Dick Smith stores

Tuesday 31st January 2012

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Australian retailer Woolworths plans to restructure its specialty consumer electronics chain Dick Smith, including closing up to 100 stores in Australia and New Zealand, with a view to eventually selling it.

Dick Smith currently has about 386 stores in Australia and New Zealand and a decision to close a large number of them had been widely predicted by analysts because of poor sales. As a result it will book a A$300 million provision in its accounts for the six months ended December.

Chief executive Grant O'Brien said since Woolworths announced a strategic review of the Dick Smith business last November he has already received a number of unsolicited approaches from would-be buyers.

“A divestment of Dick Smith will enable the Woolworths group to focus more investment on serving customers in its core business,” O'Brien said in a statement.

While consumer electronics will remain an important category for the company, it is better delivered through its Big W chain, he said. The investment and management attention given to Dick Smith have been disproportionate to its relative size within the Woolworths group, he said.

Woolworths has appointed Greenhil Caliburn to advise it on divesting Dick Smith in a way which maximises shareholder value, he said.

Woolworths shares rose 1.8 percent to A$24.90 on the ASX. The shares have risen from as low as A$23.21in November.

(BusinessDesk)

BusinessDesk.co.nz

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