Dick Smith TVs going down, down

WITH its 363 stores set to shut, Dick Smith is desperate to clear stock. Not everything is going to plan, and it’s scared.

DICK Smith is being forced to rapidly slash the prices of its home-brand TVs as wary shoppers heed consumer warnings to opt for big-name brands in the troubled retailer’s liquidation sale.

In one store, a worker told news.com.au the best-selling items were brand-name TVs and electronic cables, while shelves had been stripped of branded accessories and appliances such as Logitech mice and Kambrook blenders.

At 20 per cent markdown in most locations, the Dick Smith-branded TVs stacked in windows and along shelves are “pretty close to cost price” already, the worker said.

But customers are reportedly staying away from Dick Smith-branded TVs due to the lack of warranty cover, despite yesterday’s announcement by The Warranty Group that it would honour all valid claims.

At 22-25 per cent off, stores will begin losing money on the sales. A worker at another store said stock “probably won’t go down to cost price until just before the end”.

But with just six weeks left to offload the remaining stock, receivers Ferrier Hodgson have apparently been forced to slash prices well below cost.

In one store, news.com.au found a Dick Smith 64.5-inch FHD TV on sale for $959.20, down 36 per cent from $1499, and a 54.5-inch FHD TV for $559.20, down 38 per cent from $899.

Choice spokesman Tom Godfrey said consumers were exercising “common sense” and sticking to big-name products like Apple or Samsung in the fire sale.

“If you’re spending hundreds of dollars on electrical goods and something does go wrong, you want to ensure you can get that problem fixed quickly and efficiently,” he said.

“It’s really important that people understand that when the manufacturer and the retailer cease to exist, it’s going to be very difficult to exercise your basic consumer rights to replacement, repair and refund.”

It comes as a $1.8 million shipment of Dick Smith-branded TVs joins the glut of merchandise after the Federal Court this week ruled on a shipping dispute that held them in legal limbo.

Early in January, Chinese manufacturer Shenzhen MTC got wind of Dick Smith’s collapse and scrambled to recall 17 containers filled with TVs it had shipped to Australia.

Customers are looking for bargains on big-name brands.

Three of the containers had already been released by shipping company Toll, but the remaining 14 sat gathering dust in warehouses while a legal dispute played out between Dick Smith, Toll and Shenzhen MTC.

Shenzhen was concerned it might never be paid for the goods, with Dick Smith having been placed in voluntary administration owing $390 million to creditors.

A spokesman for receivers Ferrier Hodgson confirmed yesterday that the TVs would be sold “through the stock realisation sale process currently underway as part of the controlled store closure program”.

The fire sale has been met with lukewarm response from consumers. “Even with Dick’s demise they still can’t get a decent sale going,” wrote one poster on the OzBargain forum.

As prices will only continue to come down, “the best time to buy would be the day before your local store closes”, wrote another. “Predicting when that store closes will be the difficulty.”

The firm has previously said it would close its 301 Australian and 62 New Zealand stores by the end of April, giving Ferrier Hodgson roughly six weeks to clear out stock.

One worker complained of being kept in the dark about exactly how long their store would remain open. “At one time they said five weeks, another they say end of May,” he told news.com.au.

“You probably know as much as I do. They don’t tell us much.”

Earlier this week, online retailer Ruslan Kogan announced he was buying the Dick Smith brand, website and customer database to run as an online-only operation separate to Kogan.com.

Dick Smith customers today received an opt-out email allowing them to have their details removed from the database before it is sold to Kogan.

“If you don't want your private information passed onto a third party, now is the chance to opt out,” Mr Godfrey said.

In a statement on Thursday, Ferrier Hodgson said the receivers were “pleased with the progress of the receivers sale to date and it is tracking according to expectations”.

“Customers needn’t be concerned about buying Dick Smith-branded products as the receivers are offering a cash back promise whereby any product purchased during the receivers sale that is subsequently assessed as being faulty will either be repaired or replaced by them,” a spokeswoman said.

“Should neither of these options be possible then the receivers will promptly provide a full refund. This protection will continue to be available to purchasers of Dick Smith products for 12 months following the closure of the business and the receivers will ensure appropriate funds are retained to meet this obligation.”

She said 12 Move stores had already closed and staff offered the opportunity to be redeployed among the remaining store network during the closure program, which is expected to take six to eight weeks.

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