Dick Smith (retailer)
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|Headquarters||Chullora, New South Wales, Australia|
|Key people||Nick Abboud, CEO
Dick Smith (from Nov 2012)
|Owner(s)||Anchorage Capital Partners|
Dick Smith (formerly Dick Smith Electronics or DSE) is an international electronics retailer, founded in 1968 by Richard "Dick" Smith. Formerly owned by Woolworths Limited, now by private equity firm Anchorage Capital Partners. Founder Dick Smith no longer owns any part of the company.
The business started as a small car radio installation business in the Sydney suburb of Artarmon, New South Wales, and has expanded to employ over 2,000 people. It has co-sponsored AFL club the Richmond Tigers since 2008.
On 31 January 2012, Woolworths Limited announced that after the results of a strategic review it would close up to 100 Dick Smith stores and sell the business.
On 27 September 2012, Woolworths announced that the private equity firm Anchorage Capital Partners would purchase Dick Smith Electronics for $20M with the transition between Woolworths and Anchorage being finalised on 27 November 2012.
The business started in 1968 in the Sydney suburb of Artamon,in a small rented premises beneath a car park, with a total capital of only $610. Initially the business focused on installing and servicing car radios. In 1969, the business's success required it to move to bigger premises on the Pacific Highway in St Leonards.
Alongside the car radio business, Dick opened "Dick Smith Wholesale", initially in a house in St Leonards. The business catered for electronics hobbyists, meeting a need Dick (himself a keen hobbyist) had felt. In those days, hobbyists could only buy components from larger wholesale companies better set up for dealing with commercial customers. After touring overseas electronic stores to study modern merchandising methods, Smith introduced self-serve shopping and produced a mail-order annual catalogue with a substantial data section. To ensure almost every electronic enthusiast in Australia had one of his catalogues, it was included free in the popular electronics magazines, Electronics Australia and Electronics Today International. The catalogues included ever-increasing amounts of data on electronic components, which helped make it an essential reference for anyone involved in electronics professionally or as a hobby. This catalogue is no longer being produced, the last issue being 2009.
The company was promoted through the annual catalogue, wacky ads (e.g. the "Electronic Dick") and publicity stunts. For example, Smith claimed that he would tow an iceberg from Antarctica to Sydney Harbour, cut it up into small bits and sell it. However, he instead towed a man-made iceberg, constructed on a barge, with a big sheet of white plastic and fire-fighting foam as an April Fool's joke. The profile of Dick Smith Electronics grew.
The company profited immensely from the CB radio boom of the 1970s and by the end of the decade had stores in all mainland states. Though many CB radio stores closed when interest waned from the early 1980s, Dick Smith Electronics survived thanks to strong sales in other areas. These included its established electronic components and kit lines (thousands of people started with the "Fun Way" series and worked their way up to assembling Playmaster amplifiers and speakers), Yaesu amateur radio (the company had secured the exclusive dealership) and Uniden-Bearcat scanners.
Also important was the fast-growing personal computer market. The company sold well-known models such as the Commodore VIC-20 and Commodore 64. It also sold own-brand models, such as the System 80 which was compatible with the Tandy TRS-80 Model I, the Dick Smith Cat (an Apple II clone), the VZ-200 and VZ-300. In 1981, the Super-80 kit computer was developed as a joint venture between the company and Electronics Australia magazine.
The company was particularly innovative in its product range, especially during the 1970s and 1980s. Some such forays paid off, while others were soon abandoned. Examples of briefly stocked items in the 1980s included Heathkit electronic kits, satellite TV receiving stations and, foreshadowing near-universal mobile phone ownership, Beeple pagers. More successful was the Dick Smith Wizzard, which earned a cult following amongst computer gamers.
Before telephone equipment was de-regulated in 1984, Australian consumers could only have two different types of telephones in three different colours. DSE was a major source of "non-type approved" telephone equipment. A broad range of answering machines, cordless and novelty phones were offered; despite the fine print warning that they were not "type approved", thousands were sold anyway. Soon after, the market was de-regulated so that anyone could buy an approved phone and plug it in.
The Woolworths takeover and range changes
In 1980, the company had grown to 20 stores and the company's working capital was so much that he sold 60% of the company's working share to Woolworths Limited. Smith sold the balance to Woolworths in 1982 and it took full ownership of the company. The company continued to add to its network of small "main street" stores in suburbs and regional cities across Australia. Today there are about 200 company-owned Dick Smith Electronics stores, with authorised stockists in country areas.
Though the company has almost always stocked items that would appeal to the general non-technical/non-hobbyist consumer, as the years went on these items took up an increasing proportion of floor space. Die-hard enthusiasts often bemoaned that Dick Smith Electronics was becoming like Tandy, a competitor in the consumer electronics business which generally stocked non-technical/non-hobbyist ranges with a small range of over-priced components in bubble-packs.
After rapid growth in the 1970s and 1980s, Tandy stagnated and suffered management problems at its USA headquarters. Woolworths purchased Tandy in 2001–2002, so that both Tandy and Dick Smith became part of the same group. With the takeover, some Tandy stores were closed while others became Dick Smith Electronics stores. Both stores had overlaps in their product range with DSE (Dick Smith Electronics) products being available in Tandy outlets.
The late 1990s saw the company establish "Dick Smith Electronics Powerhouse" super-stores across the east-coast of Australia. The first PowerHouse store was opened in Bankstown, New South Wales, in 1996. These were several times bigger than regular stores and contained departments for the main product categories and supermarket-style checkouts. The "Powerhouses", as they were known, carried a wider range of products than the smaller DSE stores, especially in the computing, audio-visual and amateur radio areas, and introduced Music to the range. Some installation services were also introduced as well as Computer repairs and upgrading. Whilst the concept was well received in the first few years, there were some within Woolworths who felt that they should be smaller versions of their Big W stores, with less emphasis on Customer Service.
In 2002–2003, the Powerhouse concept changed to focus on a broader consumer market and less towards electronics enthusiasts. Component ranges shrank and general electronics books ceased to be stocked. The Yaesu dealership was relinquished, ending a 27-year partnership. Electronic Kits were transferred to the smaller DSE stores and were replaced by small appliances such as kettles, coffeemakers, toasters and frypans which were removed in late 2008. In late 2007, Powerhouse stores also transferred many other small components, tools, leads and connectors continuing to distance the super-stores from the company's roots.
In 2007, Dick Smith Powerhouse stores introduced a home installation service known as "PowerSquad" to install major items such as TVs and Computer systems or to provide set-up and training on smaller items such as wireless networks and MP3 players. The Powerhouse name was retired in 2009 as part of the company's rebranding. These stores are now known internally as Dick Smith "Large Format". The home installation service was relaunched in 2009 as "Mobile Techxpert Services" and again as "Clever Dick" in 2012, inline with the company's new branding.
In early 2008, following Woolworths' review of its consumer electronics division, Dick Smith Electronics renovated its flagship store in Hornsby, New South Wales, as a "concept" under the branding "Dick Smith Technology". The store's design and product range was completely reworked incorporating a more modern feel while removing all electrical componentry and much of its tools. These products were replaced with a larger range of computers, gaming, televisions and Macintosh computers, much of which had previously been only sold in Powerhouse stores. After a dramatic increase in sales for the store, the Hornsby concept store ended the Christmas period of sales as the highest-selling Dick Smith Electronics store in the country.
Following further strategic review, the company decided to push forward with the new concept under the reworked "Dick Smith – Talk to the Techxperts" branding, merging all existing Dick Smith Electronics and Powerhouse stores under the same banner. In late 2008 the new Dick Smith logo (designed by Hoyne Design) and format was rolled out with many Powerhouse stores such as Macquarie Centre and Auburn being rebranded to fit the new unified company logo. Powerhouse stores also cleared the majority of their small appliance lines in favour of electronic gadgets, toys and health devices with a new line of exercise equipment introduced to selected stores in early 2009. While some stores still remain semi-branded or full branded as Powerhouse, the advertising of this brand has discontinued and these stores are pending store refits to update the branding.
As of 2012[update] Powerhouse style stores, now "Large Format Stores", have opened in Chadstone Shopping Centre and Bendigo in Victoria, Marion, South Australia, Perth central business district, Innaloo and Rockingham in Western Australia, Hobart in Tasmania, and Stockland Rockhampton in Queensland, under new "Dick Smith – Talk to the Techxperts" branding. The new format stores have a refreshed look and logo, carry a similar range as all other Powerhouse stores minus the electrical components, plugs and sockets, with more of a focus on technology such as computers, entertainment and communications. This format will eventually replace the whole Dick Smith brand. In March 2009, Woolworths Limited CEO Michael Luscombe confirmed the end of Powerhouse as a separate entity, also adding that the company's third consumer electronics brand Tandy would gradually phase out over the next three years as the stores' leases ended. This phase will leave "Dick Smith" as the sole brand in the company's consumer electronics division.
The Dick Smith brand
Dick Smith Electronics has also long been known for its "home brand" range of electronics which fall under the brand name "Dick Smith" (formally called DSE, a commonly used abbreviation of Dick Smith Electronics). Although initially, in the 1980s, DSE branding focused on phones, telephony equipment and some components, the brand has since expanded into a large range of various electronic devices and components with less focus on telephony. In 2007 the DSE brand produced a wide range of products including portable DVD players, TV set-top boxes, aerials, AV receivers and amplifiers, NiCad and NiMH Rechargeable batteries as well as alkaline and lithium batteries, digital cameras, speakers, flash-memory devices, UHF radios, webcams and Ethernet, Crossover, USB, Composite AV, Component AV, 240V AC cables.
A number of the DSE brand products are re-branded products from third party manufacturers and are often sold alongside their original manufacturers version of the product. An example of this is DSE's SD card range which are manufactured by A-DATA and sold alongside A-DATA's own SD cards in many stores. Other Dick Smith house brands were Shimasu, Digitor and Koolshades, the 1990s youth brand.
Outside of Australia
In New Zealand, Dick Smith Electronics has over 75 locations including the "PowerHouse" stores, the first opening in Hamilton, then Manukau, followed by Sylvia Park in Auckland, and Palmerston North. A third brand "Dick Smith Technology" store has also opened in Lower Hutt, following the same PowerHouse product range. Its e-commerce website uses a search engine by SLI Systems that learns from what the users search for. The "Talk to the Techxperts" now "Dick Does" rebranding has commenced in New Zealand, including at the Westfield Riccarton new concept store, which opened on 28 May 2009.
In 2006, Woolworths (former parent company of Dick Smith) and the Tata Group of India announced an electronics-retailing venture on the subcontinent. Due to the legal framework, foreign companies are prevented from operating retail businesses in India. Due to this, Woolworths will act as a wholesaler to the Tata Group. Woolworths manages the buying, marketing and IT support for the joint venture. The stores are based on the Dick Smith format, but trade under the Croma brand. As is the case with head of Dick Smith New Zealand, Woolworths' head of Croma operations reports to general manager — Australia, New Zealand and India.
In 1985, the first branch in the United States opened at 390 Convention Way, Redwood City, California. The location served as the main office, mail-order centre, kit-assembly area and retail store. Additional stores opened on Shattuck Avenue in Berkeley, California; Stevens Creek Boulevard, San Jose, California; and in Los Angeles. Within a few years the US operation was sold.
- "Woolworths to sell Dick Smith Electronics"
- "Woolworths sells Dick Smith to private equity"
- http://www.abc.net.au/queensland/conversations/stories/s1614826.htm%7Cpublisher=Australian Broadcasting Corporation|date=12 April 2006|title=Businessman and adventurer Dick Smith|accessdate=2009-03-30
- "Just tip of the iceberg". Sydney Morning Herald. 23 March 2004. Retrieved 2007-12-09.
- Super-80 Computer. (August 1981). Electronics Australia, p. 70.
- "DSE About Us Page". DSE Ltd. Retrieved 2007-12-19.
- "Retailing Supernova: Dick Smith's new PowerHouse". Retrieved 2012-04-07.
- "PowerSquad Website". Retrieved 2009-01-15.[dead link]
- "Woolies sets deadline for Powerhouse and Tandy brands". Connected Australia. 9 March 2009. Retrieved 2009-04-07.
- "DSE Brand Range Search". DSE Ltd. Retrieved 2007-12-19.
- "Store Locations". DSE (NZ) Ltd. Retrieved 2013-09-24.
- "News – E-commerce Search". S.L.I. Systems.
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