Dick Smith isn’t dead just yet.
Ruslan Kogan is acquiring the Dick Smith Online business.
The rich-lister online retailer says he wants to “save the legacy of this great Australian brand, by transitioning to an online only model”, and will be transforming it using his own retail systems and architecture.
Kogan’s buy out of the online store comes after Dick Smith was initially put into liquidation in January after poor management and sales forced it into large debts.
Dick Smith receivers Ferrier Hodgson then failed to find a buyer for the brick and mortar side of the business, resulting in the closing down of all stores in Australia and New Zealand.
Kogan’s acquisition includes the Dick Smith brand and trademarks, the online business in Australia and New Zealand, customer and loyalty databases, websites and domain names.
The terms of the deal have not been disclosed, but it’s known that Kogan came to own the intellectual property after a two month auction by receivers Ferrier Hodgson.
Dick Smith will continue to operate as its own brand, with Kogan saying he will work to rebuild the consumer trust around it.
“Ultimately, a brand grows when it delivers on its promises,” he said.
“We will work tirelessly to exceed the expectations of every Dick Smith customer with a beautiful shopping experience.”
In terms of products, Kogan says that Dick Smith will continue to focus on consumer electronics and appliances, but by leveraging Kogan.com’s suppliers, will be able to offer better prices.
“The Dick Smith business will transition into a more innovative, online only, business model,” he said.
“This will allow us to leverage digital efficiencies to provide more accessible and affordable product ranges than what Dick Smith customers may have experienced in the last few years.
“The combined buying power of Kogan.com and Dick Smith will provide a compelling proposition to the world’s leading brands and suppliers. This will enable us to trade on more favourable terms and pass on those savings onto consumers,” Kogan said.
Dick Smith’s biggest changes however will be in the backend of the business, with Kogan looking to optimise it to a more innovative, streamlined business model.
Although Ferrier Hodgson has begun closing all brick and mortar Dick Smith stores, it has been maintaining the online business, including buying new stock to keep up with supply. Despite all the negative press around Dick Smith over the last 12 months, the online store still manages to pull in $95 million a year, which can now be added to Kogan.com’s $250 million.
It’s a big move for Kogan as he looks to float his business on the ASX through a $300 million IPO in the second half of this year. It’s a long way from when Kogan was selling private label consumer goods bought off credit cards from his garage 10 years ago.
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