Aussie online retailer Kogan.com will take over Dick Smith brand online from June 1

Tuesday 15th March 2016

Australia's largest web-based retailer Kogan.com will take over the Dick Smith brand as an online business on both sides of the Tasman starting on June 1 after buying the intellectual property and online assets including goodwill and brand from the receivers of the failed electronics chain.

Kogan.com founder and chief executive Ruslan Kogan said Dick Smith was an iconic Australian brand and he was thrilled to be able to keep it alive, as well as Australian-owned and run.

“I remember as a kid always visiting Dick Smith to look for parts to upgrade my computer,” he said in a statement. “There is a strong history of passion in the Dick Smith community for how technology can improve our lives and we looking forward to making it more affordable and accessible for all.”

Terms of the deal have not been disclosed.

James Stewart, Dick Smith receiver, said the deal was sealed after a thorough process with multiple bidding parties.

“As Australia’s largest pure-play online retail website, Kogan.com is a natural and logical owner of the Dick Smith online businesses and we are particularly pleased that the Dick Smith brand will continue under its stewardship.

Kogan.com plans to run a dual brand strategy, and Kogan said he’ll be able to leverage the millions of dollars he’s invested in online retail systems and architecture over the past decade to sustainably run the business.

The retailer will continue to focus on consumer electronics and appliances, offering a variety of private labels and the world’s leading brands.

There will be a transition period during the closure of Dick Smith’s bricks and mortar stores in New Zealand and Australia before Kogan.com takes over the online operations which accounted for less than 10 percent of the chain’s total sales in 2015.

Kogan.com is not so well known in New Zealand where it entered the market in 2014 and it has no staff or warehouses on the ground here. Through its websites, Kogan.com sells low-price consumer electronics, home appliances and groceries and like Dick Smith includes in-house brands in its line-up. The company was founded in 2006 by Kogan in his parent's garage.

The company is never far from controversy including being ordered by the Australian Competition and Consumer Commission to modify its advertising in 2009 after it was accused of possible misleading conduct and in 2010 Koran had a public spat with Harvey Norman founder Gerry Harvey over the future of consumer electronics retailing and whether Australians should shop online or in bricks and mortar stores.

Customer information currently held by Dick Smith will be handled in accordance with the requirements of Australia and New Zealand privacy law during the change of ownership. That means all Dick Smith customers will be contacted with the option of having their details removed prior to the transfer to the new owners. Customers who provided information after the appointment of the receivers on Jan. 4 won’t have that information passed on to the new owners.

Kogan said it will take some time to rebuild consumer trust, following dissatisfaction with receivers not honouring gift cards or laybys.

“We acknowledge that consumer trust takes years to build and can be damaged very quickly,” he said. “Ultimately, a brand grows when it delivers on its promises.”

Kogan said he wasn’t in a position to forecast what revenue the Dick Smith online business would add to Kogan.com at this stage, but he said by leveraging its existing systems it was in the best position of any Australia retailer to take up the brand.

The plan is to streamline the supply chain, ensure more competition among suppliers, and introduce logistics efficiencies.

BusinessDesk.co.nz

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