Dick Smith in receivership and for sale as crisis bites, but Atomic 212 says ‘business as usual’

Duplicate sentence: “Creditors are expected to include media agency Atomic 212, which holds the account.”

Let’s hope the media agency has watertight credit insurance in place.

Corporate Australia needs to have a long hard look at themselves over this disaster.

Amazing what one little literal will do:

Ferrier Hodgson receiver James Stewart, which was appointed by a syndicate of lenders, said the business was no for sale as a going concern

Hmm: NOT for sale? NOW for sale? NON for sale? NOR for sale?

How to turn a $90m business into a $550m business in 12 months (and buy it with less than $10m of cash), then it collapses 2 years later.

ASIC has some serious explaining to do…….

There’s been some expert analysis online about how Anchorage (the PREMIUM ECONOMY firm which picked up DSE from Woolworths) managed to make its initial numbers look amazing – “Dick Smith is the Greatest Private Equity Heist of All Time” is a superb example ( at https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-private-equity-heist-of-all-time).

Another part of the ‘smoke and mirrors’ which Anchorage used to make DSE look mega-profitable after Woolies offloaded it, was that DSE – like all other parts of Woolworths – paid Woolies a large sum for “Shared Services” such as HR, Security Monitoring, and anything else that was routed through or done through Woolworths Ltd rather than Dick Smith.

Take Shared Services out of the equation, which is exactly what happened when Anchorage took on DSE, and a business that made a <$10m profit FY 2011/2012 suddenly lists a $40-50m profit without Anchorage actually doing anything.

This massive increase in EBIT once Shared Services was off the books gave the impression that the business had turned around under Anchorage's management, something with Abboud and the rest of his senior team – most of whom who like Abboud were ex-Woolies – knew from the get-go, so they knew right away that they could make the bottom line appear to show a massive turnaround when all that changed was the removal of one line from an Excel spreadsheet.

You’re not as dump as you look, Jack.

(in above comment, should be ‘private equity’ not ‘premium economy’!)

Not newsworth at all for the Private Equity firm….
http://www.anchoragecapital.com.au/latest-news/

3300 staff looking at unemployment, thanks Anchorage.

welcomes your continent to the commencement of the AFC, nihao

Another triumph for ASIC?

@ Jack. Should the decision makers at Anchorage be prosecuted? Can they be?

First of ASIC don’t care about shareholders, they’re paid by the government who gets paid by big business like Anchorage Capital Partners, there will be a little song and dance for a while until it finally blows over, money in the right peoples pockets will make sure no one will go to jail.

Still a class action lawsuit is needed here by the shareholders and employees.

Maybe Quickflix can do a reverse share buyout equity backflip and merge with Dick Smith, via China.
They have mates at ASIC so all should be sweet

@Jack

Cheers for the input. Very insightful.

They were trying to compete with MSY and Force that operate out of industrial lock-ups and internet companies based in China, working from shopping malls with massive rents and fit-out costs. Was never gunna happen.

BTW, Harvey Norman and JB aren’t doing that well either. Officeworks has been saved by Uncle Wesfarmers several times.