Dick Smith in store decline

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#1461589 5-Jan-2016 12:44

joker97: If you think this is theft,
If you have 10,000 hrs of annual leave with dick Smith you now officially have zero.

Now that is just nasty. The receivers need staff loyalty if they hope to get a sale or trade out of trouble.

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#1461595 5-Jan-2016 12:50

Sorry i think i was referring to liquidation. I take that back. Dse not in liquidation.

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#1461596 5-Jan-2016 12:50

Dynamic:
networkn: Surely the new owners would have financial recourse against the old owners for financial misrepresentation?

We don't know if there was misrepresentation or whether the new owners simply failed in their due diligence. I've not seen/read anything suggesting any misrepresentation.

Using the analogy provided above it would seem there has to have been some propping up of the books to make them look better than they were. Sure you could have caught such a thing with a forensic accounting practice, but I am not sure that would fall under normal due diligence.

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#1461597 5-Jan-2016 12:50

Very sad to hear. Like others in here, I remember Dick Smith as THE place to go (the NZ equivalent of Radioshack - themselves having an awful 2015) and recall so fondly many hours going through all sorts of electronic goodies. Many a lunch break spent there.

Sadly these sorts of stores do not fit into our "buy it as cheaply as we can get it" and "just throw it away when it's broke" electronics world of today.

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#1461600 5-Jan-2016 12:52

joker97:
Dynamic:
Kyanar: They also confirm that stores will no longer honour gift cards and vouchers, and that if you have paid a deposit that your money is now forfeited to the receivers. A statement that if you ask me should be illegal.

I agree. This is basically theft IMHO, as is the 'expiring' of a gift voucher (especially after only 12 months).

At least when Whitcoulls situation was looking dicey, the receivers made the choice to allow the use of a gift voucher as long as you spent the same amount in cash. (http://www.nbr.co.nz/article/redeem-vouchers-sooner-rather-later-cnz-nn-86463)

If you think this is theft,
If you have 10,000 hrs of annual leave with dick Smith you now officially have zero.

No thats incorrect.

First payments are the liquidators costs. Next are employee related, whuc is wages, PAYE, annual leave, and any withheld amounts from pay. After this comes the unsecured creditors. So while employee payments may be fully paid or part paid they aren't zero.

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#1461601 5-Jan-2016 12:53

tdgeek:
joker97:
Dynamic:
Kyanar: They also confirm that stores will no longer honour gift cards and vouchers, and that if you have paid a deposit that your money is now forfeited to the receivers. A statement that if you ask me should be illegal.

I agree. This is basically theft IMHO, as is the 'expiring' of a gift voucher (especially after only 12 months).

At least when Whitcoulls situation was looking dicey, the receivers made the choice to allow the use of a gift voucher as long as you spent the same amount in cash. (http://www.nbr.co.nz/article/redeem-vouchers-sooner-rather-later-cnz-nn-86463)

If you think this is theft,
If you have 10,000 hrs of annual leave with dick Smith you now officially have zero.

No thats incorrect.

First payments are the liquidators costs. Next are employee related, whuc is wages, PAYE, annual leave, and any withheld amounts from pay. After this comes the unsecured creditors. So while employee payments may be fully paid or part paid they aren't zero.

IRD is second only to the receivers costs I believe. May come after wages owed to staff but not before the annual leave.

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#1461603 5-Jan-2016 12:57

networkn:
Dynamic:
networkn: Surely the new owners would have financial recourse against the old owners for financial misrepresentation?

We don't know if there was misrepresentation or whether the new owners simply failed in their due diligence. I've not seen/read anything suggesting any misrepresentation.

Using the analogy provided above it would seem there has to have been some propping up of the books to make them look better than they were. Sure you could have caught such a thing with a forensic accounting practice, but I am not sure that would fall under normal due diligence.

yep. I'd say the P+L and Balance Sheet are accurate. Dodgy practices, but still legal and accurate. I'd have an issue with the profit forecast that then allows the P/E to overvalue the float price. The profit forecast wasn't a profiit forecast it was a dodgy but accurate inflated profit that surely a court could say it was misleading when there was no basis for the future profit numbers, based on the makeup of that profit forecast.

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#1461604 5-Jan-2016 13:00

Kyanar:
They also confirm that stores will no longer honour gift cards and vouchers, and that if you have paid a deposit that your money is now forfeited to the receivers. A statement that if you ask me should be illegal. Gentlemen, start your chargebacks.

I don't have any gift cards, but I agree.

It's not like all the parties with a financial interest just decided to go into receivership today. It's possible the company/investors/receivers were willingly selling gift cards throughout the busiest shopping period of the year with the intention of not honouring them. That is reckless, but how to do you prove it?

It's not like their CGA obligations have ceased while their doors are still open. Anyone can return a product right now and be reimbursed, so why not gift cards?

IANAL so would be interested to know what a gift card is considered and whether you can truly fine print your way out of honouring them.

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#1461606 5-Jan-2016 13:02

I hope Jaycar take over my local store so I don't have to drive across the city like I do at the moment. Thank goodness I got rid of the gift cards my family misguidedly gave me last year.

Jaycar have low rent off main locations in NZ. That is how dick smith used to operate, and moving in the other direction was one step to failure. Imo Jaycar will be interested in very few DS locations.

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#1461607 5-Jan-2016 13:03

networkn: Surely the new owners would have financial recourse against the old owners for financial misrepresentation?

ROTFLMAO.

The "professionals" in the share market rely heavily on the "amateurs" so they can make their profits.

Typically its the little people who are not "in the know" who make most of the losses, especially with this sort of thing.

If it was not for all the "mum and dad investors" buying shares in these companies, the big players would have nowhere to shovel their losses to.

Why do you think the big players want more people to "invest" in shares, they want larger pools of people to skim from.

Think of the Sharemarket being little better than gambling and the big players being the casino owners. They require lots of losers to ensure the occasional big winer
and still allow them to skim from the top.

As for financial consultants/advisors , they are a waste of money too.
They should have to put up signs saying how much money they have won/lost AND how often their "predictions" were right/wrong.
Sure it will be all couched in "maybes", "possible", and other fluff to try and remove them from responsibility and liability, but like anyone else
if they are not willing to put their money where their mouth is, why should you trust them. And as non professionals there SHOULD be a grading
based on their performance.

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#1461609 5-Jan-2016 13:08

joker97: Sorry i think i was referring to liquidation. I take that back. Dse not in liquidation.

As someone who has been through a similar scenario I would say that you were somewhat wrong anyway. The annual leave is still a debt to you and if the company is liquidated then any monies owed for wages, leave and redundancy are semi-protected by law up to about $20k. They come out of any trading done after the receivership as opposed to money from the sale of assets, etc., if I recall correctly, and you are a preferred creditor for those funds. Anything over that $20k you can kiss goodbye to, though :/

I had this happen to me when GEON went under a few years ago. Most of the staff I knew were ok as they were owed less than the maximum, but a few did get burnt by the cap.

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#1461610 5-Jan-2016 13:09

sdav:
Kyanar:
They also confirm that stores will no longer honour gift cards and vouchers, and that if you have paid a deposit that your money is now forfeited to the receivers. A statement that if you ask me should be illegal. Gentlemen, start your chargebacks.

I don't have any gift cards, but I agree.

It's not like all the parties with a financial interest just decided to go into receivership today. It's possible the company/investors/receivers were willingly selling gift cards throughout the busiest shopping period of the year with the intention of not honouring them. That is reckless, but how to do you prove it?

It's not like their CGA obligations have ceased while their doors are still open. Anyone can return a product right now and be reimbursed, so why not gift cards?

IANAL so would be interested to know what a gift card is considered and whether you can truly fine print your way out of honouring them.

Gift cards makes you a non secured creditor.
Its just another way for the big players to push losses down onto the small players.

The ONLY gift card worth its money are the ones issued by the Reserve Bank, i.e. Cash.
It allows you to shop in any location.
It guarantees you change if the value of the item is less than the value of the "gift card" (Some Gift cards say they do NOT give out change!)
and you can even bank it to earn interest on it while you wait for something worth buying.

[Edited for another thought]
At the very least you should be able to get the GST back on it because no goods or services were obtained.

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#1461612 5-Jan-2016 13:12

sdav:
Kyanar:
They also confirm that stores will no longer honour gift cards and vouchers, and that if you have paid a deposit that your money is now forfeited to the receivers. A statement that if you ask me should be illegal. Gentlemen, start your chargebacks.

I don't have any gift cards, but I agree.

It's not like all the parties with a financial interest just decided to go into receivership today. It's possible the company/investors/receivers were willingly selling gift cards throughout the busiest shopping period of the year with the intention of not honouring them. That is reckless, but how to do you prove it?

It's not like their CGA obligations have ceased while their doors are still open. Anyone can return a product right now and be reimbursed, so why not gift cards?

IANAL so would be interested to know what a gift card is considered and whether you can truly fine print your way out of honouring them.

1. If the state of the business was such that it was going down the gurgler, then the directors can be liable. Buying goods from creditors when there was going to be no way to honour those debts. Takiomg money from gift cards knowing they won't be honoured. Same issue, if this is the case, I'm not saying it is. And thats short term cashflow, the oil a company runs on. Cashflow is king, more important than profit, and both of these facets were poor

Liquidation is now. Its immediate, all bets are off. If the business is allowed to trade, yes, there are options, but often its not as its another day of loss to bear for the secured creditors. The secured creditors may pop in and take their goods, almost literally

EDIT its not in liquidation. Skimming too much!

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#1461613 5-Jan-2016 13:12

gzt:
I hope Jaycar take over my local store so I don't have to drive across the city like I do at the moment. Thank goodness I got rid of the gift cards my family misguidedly gave me last year.

Jaycar have low rent off main locations in NZ. That is how dick smith used to operate, and moving in the other direction was one step to failure. Imo Jaycar will be interested in very few DS locations.

The other thing is that DS is in a lot of malls, and I believe many malls take a percentage of sales, as well as rent. So I can't see them wanting to operate in those sorts of areas. Jaycar is more of a destimation store, DS eventually became a toaster shop (literally), so was often just a store to pop into as you were passing.

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#1461614 5-Jan-2016 13:13

gzt:
I hope Jaycar take over my local store so I don't have to drive across the city like I do at the moment. Thank goodness I got rid of the gift cards my family misguidedly gave me last year.

Jaycar have low rent off main locations in NZ. That is how dick smith used to operate, and moving in the other direction was one step to failure. Imo Jaycar will be interested in very few DS locations.

Agree with this. Can't really see Jaycar wanting any of DSE's stock either. I think if Jaycar have expansion plans there'll be current DSE locations outside of CBD's that may interest them but a buyout of those businesses would probably be off the cards - why pay a 'reasonable' price for something when you can just let it fail then pick up the scraps you do want at a bargain price.

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