The Dick Smith electronic retail project is dead.
Receivers for the electronics chain, Ferrier Hodgson, announced yesterday the stores will stop trading.
All stores across Australia and New Zealand will be closing over the next eight weeks, aside from the Move airport locations.
Receiver James Stewart said, “While we received a significant number of expressions of interest from local and overseas parties, unfortunately the sale process has not resulted in any acceptable offers for the group as a whole or for Australia or New Zealand as standalone businesses. The offers were either significantly below liquidation values or highly conditional or both.”
Approximately 2,460 staff will be impacted by the 301 store closures in Australia and approximately 430 staff from 62 stores in New Zealand, with all receiving redundancy payouts unless they resign earlier.
All employees will rank as priority in unsecured claims, ahead of secured creditors and are expected to be paid out in full. Any entitlements accrued such as wage, superannuation or annual leave during the receivership period will be paid in their final wage payment. Anything pre-appointment and redundancy payouts will be paid as soon as funds are available.
Even so, Ferrier Hodgson has said the distribution of those funds will take up to two months after the wind down process is complete, or roughly when all stores are closed.
Employees were briefed earlier yesterday. Here’s the letter employees received, obtained by Business Insider.
“The ultimate timing of store closures will be dependent on the outcome of the stock realisation sale,” the letter reads.
“We will endeavour to provide you with as much notice as possible of the exact date that your store will close.
“The Receivers are in continued discussions regarding the continuity of the Move Airport stores and as such the Move Airport stores will continue to operate as normal while these discussions are ongoing.”
It’s also been confirmed that a fire sale will take place from today, February 26, with UK based liquidators Hilco looking over the sale of stock as the stores close down.
This closure comes just a month after the retailer penned an open letter to customers, saying that “Dick Smith is still here, and we feel we have a lot more to offer.”
One employee told Business Insider that the Dick Smith support office spoke to employees in a reassuring manner, encouraging that the stores weren’t likely to shut down.
It was reported that Dick Smith was bleeding close to $3 million a week as receivers Ferrier Hodgson negotiated the now failed sale of the business.
The closure comes after Ferrier Hodgson announced in early January that the Australian electronics chain would be going into voluntary administration after poor management and sales forced it into large debts.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.