Dick Smith in store decline

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#1461762 5-Jan-2016 15:43

michaelmurfy:
Kyanar:
tdgeek:

So the voucher should be ok, subject to any fine print. And thus the employees would be in a better position

EDIT Right now, this is an Australian store issue, so BAU here. For now. Get buying and cashing them in

Uh, no. The receivers have already announced that no vouchers or gift cards will be honoured.

How can they get away with this? Pretty lame for those unlucky enough to get vouchers for Xmas...

And the stationery supplier, and the power bill, and so on and so on. There will be invoices for heaps of stuff
that won't have or cannot have a Romalpa clause. Romalpa clause means these goods were invoiced but are not
owned until paid for, so reciever will be grabbing them and liquidating at best value to protect the secured creditor
who owns them. And there are the two banks

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#1461764 5-Jan-2016 15:45

Jaxson:
michaelmurfy:
Kyanar:

Uh, no. The receivers have already announced that no vouchers or gift cards will be honoured.

How can they get away with this?

The company can't pay it's bills, someone else comes in to manage them, they place a priority on refunding money to investors over customers.

Secured over unsecured. The affected customers might be relatively low compared to everyone else who is unsecured

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#1461765 5-Jan-2016 15:47

sdav:
tdgeek:
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!

I just think using the general public's/shopper's money as a way to increase cashflow when your business is struggling should be illegal (if it isn't already). People take risks going on the sharemarket but that is a decision you actively take. They are essentially spreading their own risk to innocent shoppers to top up the coffers of a fledgling business. How should that be allowed (if it isn't, again I don't know)?

If the board carries on business when it cannot get out of trouble, and insolvency is the only possible outcome, that is negligence, and they can have a civil suit taken against them.

dafman

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#1461787 5-Jan-2016 16:15

richms:
I still dont understand why people buy vouchers when cash is still a thing.

If you want to buy a voucher, at least a prezzie card is backed by Kiwibank.

Dick Smith started their fire sales in November, with quite a lot of press surrounding their cash flow difficulties, so purchasing DSE vouchers for Xmas were always a risky proposition.

sdav

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#1461788 5-Jan-2016 16:16

tdgeek:
sdav:

I just think using the general public's/shopper's money as a way to increase cashflow when your business is struggling should be illegal (if it isn't already). People take risks going on the sharemarket but that is a decision you actively take. They are essentially spreading their own risk to innocent shoppers to top up the coffers of a fledgling business. How should that be allowed (if it isn't, again I don't know)?

If the board carries on business when it cannot get out of trouble, and insolvency is the only possible outcome, that is negligence, and they can have a civil suit taken against them.

I did know they could be liable at some point. I was just thinking about how gift cards/lay-bys etc. could be stopped earlier so shoppers with no financial interest aren't affected? No idea how you could regulate that though unless you just banned gift cards altogether... Cashflow should come from the products other investors you sell, not pieces of (potentially) worthless plastic.

sdav

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#1461791 5-Jan-2016 16:20

dafman:
richms:
I still dont understand why people buy vouchers when cash is still a thing.

If you want to buy a voucher, at least a prezzie card is backed by Kiwibank.

Dick Smith started their fire sales in November, with quite a lot of press surrounding their cash flow difficulties, so purchasing DSE vouchers for Xmas were always a risky proposition.

That's what's frustrating though, a lot of people would have been unaware (not everyone follows news, let alone business news...) Dick Smith was heading south. At least low customer numbers would likely translate into low numbers of gift cards sold!

tdgeek

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#1461792 5-Jan-2016 16:25

sdav:
tdgeek:
sdav:

I just think using the general public's/shopper's money as a way to increase cashflow when your business is struggling should be illegal (if it isn't already). People take risks going on the sharemarket but that is a decision you actively take. They are essentially spreading their own risk to innocent shoppers to top up the coffers of a fledgling business. How should that be allowed (if it isn't, again I don't know)?

If the board carries on business when it cannot get out of trouble, and insolvency is the only possible outcome, that is negligence, and they can have a civil suit taken against them.

I did know they could be liable at some point. I was just thinking about how gift cards/lay-bys etc. could be stopped earlier so shoppers with no financial interest aren't affected? No idea how you could regulate that though unless you just banned gift cards altogether... Cashflow should come from the products other investors you sell, not pieces of (potentially) worthless plastic.

I agree and I dont see why not. If the business is falling into insolvency, and we can't get out of that, ANY business undertaken is negligent. Taking cash for cards and laybys (where that cash went to creditors to avoid being on a stoplist for goods, etc and is now gone) . Buying goods for resale is negligent. But its not that easy it has to be proven.

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#1461795 5-Jan-2016 16:27

sdav:
dafman:
richms:
I still dont understand why people buy vouchers when cash is still a thing.

If you want to buy a voucher, at least a prezzie card is backed by Kiwibank.

Dick Smith started their fire sales in November, with quite a lot of press surrounding their cash flow difficulties, so purchasing DSE vouchers for Xmas were always a risky proposition.
That's what's frustrating though, a lot of people would have been unaware (not everyone follows news, let alone business news...) Dick Smith was heading south. At least low customer numbers would likely translate into low numbers of gift cards sold!

Name brand businesses don't fail every year. I can't remember the last one. Many just end up being closed as its not viable any longer. And Xmas when gift card sales would be high, thats tough

richms

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#1461796 5-Jan-2016 16:29

Whitcouls failed in the same way recently. I really think that other than steam and itunes cards there is no reason for gift cards to exist any more.

Worst are the ones like westfield ones which only work in person at certain locations.

Richard rich.ms

sdav

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#1461797 5-Jan-2016 16:35

richms: Whitcouls failed in the same way recently. I really think that other than steam and itunes cards there is no reason for gift cards to exist any more.

Worst are the ones like westfield ones which only work in person at certain locations.

Even then I could live without Steam/iTunes cards!

richms

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#1461799 5-Jan-2016 16:41

sdav:
richms: Whitcouls failed in the same way recently. I really think that other than steam and itunes cards there is no reason for gift cards to exist any more.

Worst are the ones like westfield ones which only work in person at certain locations.

Even then I could live without Steam/iTunes cards!

Only way for people with no credit card to get things on there and actually do make good gifts since its the sort of thing that kids will actually use. Where as a dick smith card is likly to go unused.

Richard rich.ms

sdav

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#1461803 5-Jan-2016 16:51

richms:
sdav:
richms: Whitcouls failed in the same way recently. I really think that other than steam and itunes cards there is no reason for gift cards to exist any more.

Worst are the ones like westfield ones which only work in person at certain locations.

Even then I could live without Steam/iTunes cards!

Only way for people with no credit card to get things on there and actually do make good gifts since its the sort of thing that kids will actually use. Where as a dick smith card is likly to go unused.

True!

Yogi02

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#1461805 5-Jan-2016 17:03

Its a bit of a concern that the online store is still operating.
What chance would you have of goods actually arriving?

dolsen

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#1461812 5-Jan-2016 17:17

So, are there any deals currently to be had?

On this page (stuff), someone is quoted as saying "I came looking for some things at the right price and found them". Not sure if there were any fire / inferno sales still continuing, or, need to wait a bit.

Bad news for the staff and investors, however, the actual store has been quite useless for me for a while now. Luckily, I had warned people I knew not to buy DS gift cards due to the risk before Christmas.

tripp

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#1461824 5-Jan-2016 17:46

The thing that gets me is that management said sales numbers were not as they expected for December sales.

Well 1 reason for that is because staff did not update the labels on items, there were a number of items that had the RRP but you would only know if they were on sale if someone posted a pic on here or you made them scan each item you were looking at (which the staff hated).
More than once from a couple of different shops I asked to look at the price listing to see if there was anything and both times was told "we did not get one" or just blank looks.

Another example is random pricing between colours, green ipad mini cover $99 yet the blue was $5.

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