Australia’s biggest electricals retailer, Dick Smith, has plunged into administration just two years after listing on the country’s stock exchange.
Dick Smith Holdings has appointed a voluntary administrator and receiver a day after the retailer suspended trading in its shares.
The retailer issued two profit warnings in October and November last year, causing its share price to plummet.
It slashed prices across its stores in the run-up to Christmas in a bid to revive sales, but was forced to suspend its shares from trading yesterday.
A syndicate of Dick Smith lenders, including National Australia Bank and HSBC, called in Ferrier Hodgson as receivers this morning in a bid to salvage value from the business. McGrathNicol has been appointed administrator.
Ferrier Hodgson partner James Stewart insisted it would be business as usual for Dick Smith while it calls for “expressions of interest for a sale” of the retailer.
Dick Smith’s 3,300 workers will continue to be paid across 393 stores but shoppers will be unable to redeem gift vouchers.
The retailer blamed its plight on worse than expected sales and cash generation in December.
Dick Smith chairman Rob Murray said in a statement that directors were “confident on the long-term viability of the company” but admitted they had been “unsuccessful in obtaining the necessary support of its banking syndicate to see it through this period”.
Retail giant Woolworths received $94m (£46.05m) after selling Dick Smith Holdings to private equity firm Anchorage Capital Partners in 2012.
A year later, Anchorage floated the company on the Australian share market at $2.20 (£1.08) a share, valuing it at $520m (£254.75m).