Dick Smith in store decline

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#1465306 7-Jan-2016 18:17

tdgeek (and others)

From a legal perspective the DSE operating today is a different entity to the DSE that traded a month ago and sold those gift cards.

It matters not whether they are profitable or have the doors open. Anyone with a gift card is an unsecured creditor and DSE (administrators & receivers appointed) - which is how they are legally know now doesn't owe the gift card holder anything. We may end up with a Whitcoulls scenario - Whitcoulls would take the gift card if you paid an equal amount in cash. Eg $40 purchase, $20 giftcard and $20 cash. But they are not legally required to do so.

dafman

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#1465307 7-Jan-2016 18:19

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dafman:

But that's the value proposition for retailers in selling gift cards - they generate/stimulate cash flow!

Remove the value proposition, retailers would just stop selling them as gift cards would offer no advantage to over the counter sales.

In fact, there would be a disadvantage under your scenario as retailers would have to pay overhead costs for maintaining gift card trust accounts, being additional costs not incurred with over the counter sales.

There are other reasons for selling gift cards aside from the cashflow benefits.

As previously stated, a proportion of giftcards do not get redeemed - free money!

But I would say the biggest advantage for gift cards is it brings people into the store who want to buy things with them - not just browsing, they are there to spend.

My son, likes his gaming. For Christmas and birthday's someone always gives him an EB gift card. EB is generally overpriced and prefer to shop elsewhere however with an EB giftcard my son has no choice but to find something to buy there. e.g. he wanted Fallout 4 (Xbone)when it came out - $119 from EB or $76 from nzgameshop.

Tell a lie, he found some mug (me!) to take the card off him for cash. Anyone know the best way to use an EB card without losing too much value? (I would say itunes cards but they are often 25% off elsewhere).

So for your son, the benefit of selling the gift card was 100% cash flow (for him!) (-;

dafman

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#1465308 7-Jan-2016 18:19

logo:
dafman:

But that's the value proposition for retailers in selling gift cards - they generate/stimulate cash flow!

Remove the value proposition, retailers would just stop selling them as gift cards would offer no advantage to over the counter sales.

In fact, there would be a disadvantage under your scenario as retailers would have to pay overhead costs for maintaining gift card trust accounts, being additional costs not incurred with over the counter sales.

There are other reasons for selling gift cards aside from the cashflow benefits.

As previously stated, a proportion of giftcards do not get redeemed - free money!

But I would say the biggest advantage for gift cards is it brings people into the store who want to buy things with them - not just browsing, they are there to spend.

My son, likes his gaming. For Christmas and birthday's someone always gives him an EB gift card. EB is generally overpriced and prefer to shop elsewhere however with an EB giftcard my son has no choice but to find something to buy there. e.g. he wanted Fallout 4 (Xbone)when it came out - $119 from EB or $76 from nzgameshop.

Tell a lie, he found some mug (me!) to take the card off him for cash. Anyone know the best way to use an EB card without losing too much value? (I would say itunes cards but they are often 25% off elsewhere).

So for your son, the benefit of selling the gift card was 100% cash flow (for him!) (-;

oxnsox

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#1465351 7-Jan-2016 19:26

There's something just a little odd about the this whole DSE implosion.
Reports in the media from late last year sugested the organisation was holding too much inventory due to poor sales. (I guess it's all distributed from Oz now, but they did used to have a massive wharehouse in Albany). That inventory I'm guessing was/is (in $$$ terms) predominantly made up of DSE branded stock, as they're still stocking and specialing that.
Other 'branded' stock (probably parallel imported lines) seemed to be specialed off early on, often at silly prices, perhaps for cash flow????

Yet the word is also that they're unable to carry sufficient inventory.

And OK they've got empty shelve space around mobile accesiories (phone covers etc), which they stated was what they needed to clear, but other wise they're offering their now fairly standard broad brush range ( TV's, PC's, home network stuff, kitchen appliances, etc, both on-line and in-store.

Given their situation it's unlikely much of this stock is ón-consignment' as the risk/exposure to the likes of HP, Samsung etc, would be too high.
It all just seems rather odd to be both over-stocked and not holding enough stock????

richms

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#1465356 7-Jan-2016 19:41

oxnsox: There's something just a little odd about the this whole DSE implosion.
Reports in the media from late last year sugested the organisation was holding too much inventory due to poor sales. (I guess it's all distributed from Oz now, but they did used to have a massive wharehouse in Albany). That inventory I'm guessing was/is (in $$$ terms) predominantly made up of DSE branded stock, as they're still stocking and specialing that.
Other 'branded' stock (probably parallel imported lines) seemed to be specialed off early on, often at silly prices, perhaps for cash flow????

Yet the word is also that they're unable to carry sufficient inventory.

And OK they've got empty shelve space around mobile accesiories (phone covers etc), which they stated was what they needed to clear, but other wise they're offering their now fairly standard broad brush range ( TV's, PC's, home network stuff, kitchen appliances, etc, both on-line and in-store.

Given their situation it's unlikely much of this stock is ón-consignment' as the risk/exposure to the likes of HP, Samsung etc, would be too high.
It all just seems rather odd to be both over-stocked and not holding enough stock????

How many people will be shopping for 30 pin iphone cables, and analog $30 RCA cables and thermal fax paper? All things that were in huse supply at the DS I was last in. Also ink is another product where you can have heaps of stock that noone wants, and it expires too. Cheap junk USB2.0 small capacity sticks for well over what they should cost was also in plenty of supply

They had no external HDDs, no USB3 sticks, limited selection of large SD cards, all at absurd prices for the capacity. They had a giant camera stand bare of any cameras except for a few really old looking canon powershots.

Richard rich.ms

Dunnersfella

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#1465375 7-Jan-2016 20:36

richms:

How many people will be shopping for 30 pin iphone cables, and analog $30 RCA cables and thermal fax paper? All things that were in huse supply at the DS I was last in. Also ink is another product where you can have heaps of stock that noone wants, and it expires too. Cheap junk USB2.0 small capacity sticks for well over what they should cost was also in plenty of supply

Phew - thanks for the heads up!
I need some thermal fax paper... and now that you mention it, maybe at least a dozen 30 pin iphone cables.
Do you think they'd be able to do me a deal if I buy in bulk? Say, 250% over market rate?

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#1465376 7-Jan-2016 20:36

dafman:
logo:
dafman:

But that's the value proposition for retailers in selling gift cards - they generate/stimulate cash flow!

Remove the value proposition, retailers would just stop selling them as gift cards would offer no advantage to over the counter sales.

In fact, there would be a disadvantage under your scenario as retailers would have to pay overhead costs for maintaining gift card trust accounts, being additional costs not incurred with over the counter sales.

There are other reasons for selling gift cards aside from the cashflow benefits.

As previously stated, a proportion of giftcards do not get redeemed - free money!

But I would say the biggest advantage for gift cards is it brings people into the store who want to buy things with them - not just browsing, they are there to spend.

My son, likes his gaming. For Christmas and birthday's someone always gives him an EB gift card. EB is generally overpriced and prefer to shop elsewhere however with an EB giftcard my son has no choice but to find something to buy there. e.g. he wanted Fallout 4 (Xbone)when it came out - $119 from EB or $76 from nzgameshop.

Tell a lie, he found some mug (me!) to take the card off him for cash. Anyone know the best way to use an EB card without losing too much value? (I would say itunes cards but they are often 25% off elsewhere).

So for your son, the benefit of selling the gift card was 100% cash flow (for him!) (-;

Well sort of - he was happy to pay $119 to EB but I wasn't going to allow him to do that (he was short $30 at the time so needed my help). Instead I bought it from nzgameshop for $76 but still charged him $119 (technically $64 cash, $30 IOU and $25 EB gift card).

richms

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#1465377 7-Jan-2016 20:42

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Well sort of - he was happy to pay $119 to EB but I wasn't going to allow him to do that (he was short $30 at the time so needed my help). Instead I bought it from nzgameshop for $76 but still charged him $119 (technically $64 cash, $30 IOU and $25 EB gift card).

When I went shopping with the cousins I made them get their phone out and check pricespy to see what the thing they wanted cost elsewhere, much to the annoyance of the shop staff.

Richard rich.ms

sir1963

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#1465431 7-Jan-2016 21:23

Dunnersfella:
richms:

How many people will be shopping for 30 pin iphone cables, and analog $30 RCA cables and thermal fax paper? All things that were in huse supply at the DS I was last in. Also ink is another product where you can have heaps of stock that noone wants, and it expires too. Cheap junk USB2.0 small capacity sticks for well over what they should cost was also in plenty of supply

Phew - thanks for the heads up!
I need some thermal fax paper... and now that you mention it, maybe at least a dozen 30 pin iphone cables.
Do you think they'd be able to do me a deal if I buy in bulk? Say, 250% over market rate?

We went to buy the iPhone cable, they wanted $20 for it.

HOWEVER, if we got the cable boxed with a car/usb power adaptor it cost $2.

Crazy.

richms

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#1465436 7-Jan-2016 21:36

What is more crazy is they had at least 3 brands of the same charger when I was looking thru. All different prices.

Richard rich.ms

raytaylor

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#1465439 7-Jan-2016 21:40

MurrayM:
jpoc:
You must have noticed that there are certain brands that hardly ever get significant discounts. Apple for one, but they are not alone. DSE could not drop their prices for top brand products by a large amount because of contractual clauses in their relationships with those suppliers.

I've noticed that whenever large chain stores have sales (i.e. "50% of everything!") they very often have some fine print that says "Excludes Apple and game consoles". I've often wondered why this was so, do Apple and gaming consoles usually sell so well that they never need to discount them? Or does Apple, Playstation, etc have contracts in place that say retailers aren't allowed to discount their products?

Most retailers such as the warehouse or noels will make about $4 on selling a playstation.
The margin is in the games and accessories.

Same with apple - I think they are about 5%

It costs the salesman a further 3% to do a 36 month HP with 12 months interest free and deferred payments.

So to sell a playstation, if you do it on interest free its costing the retailer too much.

Ray Taylor

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richms

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#1465445 7-Jan-2016 21:44

Way more than 3% for 36 month interest free.

Richard rich.ms

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#1465468 7-Jan-2016 22:44

I went in and asked them before Xmas for a SPDIF cable to connect the 3.5 mm optical out on an iMac to a standard optical SPDIF input on a DAC.

I may as well have asked for solid fuel rocket boosters....

DarthKermit

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#1465471 7-Jan-2016 22:53

^^^

andrew027

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#1465477 7-Jan-2016 23:16

I was up in Auckland between Christmas and New Year and decided (long story) my dad needed a cordless phone. Although I was staying in Takapuna we spent a day at Sylvia Park as my daughter needed new clothes now she's finished high school (where she's worn uniform 5 days a week for 5 years). While there I got dad a phone at DS as a suitable Uniden one with big numbers and a loud ring was (surprise) on sale. At the counter a shop assistant opened the box, pulled a few things out to look in, said everything was there, closed it up again, and completed the sale.

When we got back to Takapuna I thought I'd plug it in to charge before setting it up at my dad's (in Orewa) the next day. Imagine how p!$$ed off I was to find no power supply for the base unit and no batteries for the handset in the box.

I was waiting at DS in Takapuna when they opened the next day. Told the guy there what had happened and the answer was "You have to go back to Sylvia Park". No. Ten minutes arguing and a 20 minute phone call to Sylvia Park and they eventually exchanged it in the Takapuna store, but it shouldn't be that hard.

Now I just have to hope it keeps working as there won't be anyone to return it to soon.

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