Electronics retailer Dick Smith has been placed into voluntary administration, after a torrid year for the retailer in which its shares plummeted in value by 80 per cent.
In a statement published by the Australian Securities Exchange on Tuesday, Dick Smith Holdings chairman Rob Murray announced the move, with McGrath Nicol appointed as administrators.
"It is with considerable regret that the Board... has placed the Company into voluntary administration," he wrote.
"Sales and cash generation in December were below market expectations, continuing a trend experienced during 2Q 2016. The company explored alternate funding, however the directors formed the view that any success in obtaining alternative funding would not have been sufficiently timely to support short-term funding requirements and allow the Company to order required inventory during the next four to six weeks."
Company founder Dick Smith
The announcement follows Monday's request by the company to have its shares placed in a trading halt after its major lenders called in receivers Ferrier Hodgson.
By Tuesday morning, the company said it had chosen to go into voluntary administration, with McGrath Nicol to handle the asset distribution.
In happier times; CEO and Managing Director Nick Abboud at the launch of Dick Smith's listing on the ASX in 2013
The iconic brand, founded in the 1960s by the Australian entrepreneur and aviator Dick Smith, had been one of the leading names in electronics for decades; however, recent years have seen the retailer struggle as competitors branched out their offerings and customers increasingly turned online for their technological needs.
Dick Smith Holdings had seen its share price plunge from $2.20 when the company floated in 2013 and $2.10 as recently as February, to below 30 cents in November and just 35 cents when they last traded on December 31. The slumps had come off the back of two profit warnings after disappointing sales figures in October and November.
Smith himself, after starting the company with a small store in Sydney in 1968, sold the company to Woolworths Limited in two parts between 1980 and 1982. In 2012, Woolworths announced plans to close dozens of stores and sell the company to Anchorage Capital Partners. This sale was soon followed by Dick Smith's floating on the ASX in 2013.
Speaking to the Sydney Morning Herald, Smith criticised the recent management of the company he founded and comparing the chain to Harvey Norman and JB Hi-Fi.
"I imagine there is room for three consumer electronics companies, but they need to be well managed," Smith said.
"They [Woolworths] opened too many shops and then ended up in problems with it, and that's why they sold it for $90 million... basically don't play the share market because I don't have expertise. I've never owned shares in Dick Smith Electronics or Woolworth or Coles or any of those type of organisations. Too risky for me."