Angry shoppers accuse Dick Smith staff of ‘hoarding’ items during fire sale

DICK Smith is investigating reports that staff “hoarded” sought-after items such as TVs during its fire sale, leaving geniune customers out of luck.

DICK Smith says it is investigating reports that staff “hoarded” sought-after items such as TVs and MacBooks during its fire sale, leaving genuine customers out of luck.

The electronics retailer kicked off its “mammoth sale” on Friday, offering discounts of up to 80 per cent on unwanted stock, including up to 70 per cent off smart TVs, but many furious customers took to Facebook and internet forums to complain of staff keeping the best items out of reach.

“What’s the best way to report staff and store managers hoarding items out back for themselves and their friends to buy? Far too many reports of this type of shady behaviour to make it worthwhile to visit a store without your assurances,” Shanan Kan wrote on Dick Smith’s Facebook page.

Jonathan Greirson said he had phoned the Morley Galleria store in Perth and “was told by a staff member that staff had had first dibs on products prior to the doors opening to the public and that anything left were then up for grabs when the [sale] started”.

Chris Di Dios claimed staff at Sydney’s Top Ryde and Macquarie Centre stores were hoarding Samsung Smart LED TVs and “making BS that they were empty boxes”.

“Really? Never knew unbroken tape on bottom/top with MacBook Airs sealed were empty boxes. Why were they in the security cage?” he said.

Customer Jordan Nash said he “openly saw an employee at the Ashfield store talking to his mate about this morning”. “Bragging about it was more important than helping a potential customer, it seems,” he wrote.

“Would be nice if all your staff didn’t buy all the good deals and brag about it where us customers can hear them! Just like last time!” Jamie-lee Taylor-Manzanares added.

Matthew White reported the same thing at Victoria’s Chadstone store. “Think this should be called Staff & Friends Dick Smith Sale,” he wrote. “Not mammoth sale. Mammoth PR disaster.”

One poster on the OzBargain forum reported staff at a store in Robina, Queensland, “[filling] up a trolley” with cameras “leaving nothing for anyone else”.

Customers were disappointed by the items on offer at this weekend’s sale. Picture: AAP Image/Joel Carrett

Another claimed a Dick Smith employee had told him staff were told in an email they couldn’t buy sale products until Monday. “I said, ‘But that doesn’t stop you from hiding stuff out the back’, they both snickered and made it half obvious that they were hoarding,” he wrote.

In response to the flood of complaints, a Dick Smith spokeswoman said: “We take these matters very seriously and would like to investigate further. Please PM [private message] us further information along with your contact details and we will raise this with the relevant team.”

Rival retailer Gerry Harvey, of Harvey Norman, last week described the idea of a fire sale in the crucial Christmas period as “suicidal”, days after Dick Smith saw its share price collapse after a $60 million writedown in the value of its inventory.

“That will only make it so much worse for them,” Mr Harvey told The Australian. “They are not making any money if they sell everything in a fire sale. They will lose a lot of money. Why would they do that — that’s committing suicide.’’

In a statement to news.com.au, a Dick Smith spokeswoman said: “Dick Smith is really pleased with the volume of customer support from both Australian and New Zealand consumers who got a jump start on their Christmas shopping over the weekend. Store traffic was high and sales performance was very positive.

“We are continually updating discounted products so consumers should visit their local Dick Smith store to see the specific deals available. The sale is only available in store and product varies from store to store. As there is limited stock, product is not guaranteed and customers should act fast to get the best bargains.

“Dick Smith does not allow its staff to hold back or reserve any discounted product before it is available to the general public. Dick Smith takes any allegations of this occurrence very seriously and is investigating the allegation further, in addition to reinforcing our existing policy with all staff members.”

Dick Smith stores are struggling throughout Australia. Picture: AAP Image/Dave Hunt

On Friday, IG Markets analyst Angus Nicholson described the fire sale as an “act of desperation” that would kick off a damaging price war, forcing JB Hi-Fi and Harvey Norman to drop their prices to compete during a period when most retailers made one third of their annual revenue.

“Once you’re doing 70 per cent markdowns you’re making a loss, nowhere near breaking even at all, you’re just trying to get it out the door,” he said. “It’s going to be really damaging to other stocks in the sector and going to hurt next year [in their profits].”

Mr Nicholson said it demonstrated how failures at one company could bleed into the rest of the sector. “It’s a disaster for [JB Hi-Fi and Harvey Norman] who are suffering from Dick Smith’s mismanagement,” he said.

The sale came on the same day it was announced Dick Smith would drop out of the list of Australia’s top 200 companies in the ASX 200 index’s quarterly reshuffle. Dick Smith shares closed down one cent, or 2.5 per cent, at 39 cents on Monday.

The retailer listed on the share market for $2.20 a share two years ago, raising $345 million after private equity firm Anchorage bought it from Woolworths for $20 million in 2012.

At the Woolworths annual general meeting last month, chairman Gordon Cairns addressed concerns raised by investors in the media about the sale process.

“I was able to reassure the shareholder privately that we held an open and competitive sale process, that there were a number of interested parties, and ultimately we sold to the highest bidder,” he said.

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