Dick Smith to shut down for good

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Dick Smith to shut down for good

Receivers couldn't find a buyer.

Technology retailer Dick Smith will shut all its stores and offices after its receivers failed to find a buyer for the business.

Dick Smith went into voluntary administration in early January owing $390 million to creditors after being unable to access short-term funding following poor sales over the Christmas period.

It appointed McGrathNicol as its administrator to look at all options that could allow the business to keep operating as a going concern.

But Ferrier Hodgson, the receiver appointed by banks owed more than $140 million by Dick Smith, today said while a "significant number" of expressions of interest were made for the group, none had been acceptable.

It described the conclusion as a "very disappointing outcome". 

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"The offers were either significantly below liquidation values or highly conditional or both," Ferrier Hodgson said.

The remaining 301 Dick Smith stores in Australia and 62 stores in New Zealand will close over the next eight weeks, the receivers said.

Around 2890 staff across both countries will be affected.

All Australian employees will receive their entitlements in full ahead of secured creditors, Ferrier Hodgson said.

The firm said employees had been briefed on the closure today.

Dick Smith was floated by private equity firm Anchorage Capital Partners two years ago for $520 million after Anchorage bought the retailer from Woolworths in 2012 for $115 million.

The retailer's demise has been blamed on poor inventory management, misdirected product strategy and the wider struggles of the retail sector.

Poor product management forced the company late last year to write off $60 million in inventory - equal to 20 percent of its stock - before embarking on a massive fire sale in December.

The clearance - which offered in some cases discounts of up to 70 percent and was described as "suicidal" by rival retailer Gerry Harvey - was intended to offload excess inventory in a desperate attempt to restore the group's profitability.

But the fire sale failed to generate as much cash as expected, and Dick Smith's financiers forced it into receivership in early January with debts of $390 million.

The receivers at the time said it was "business as usual" for the company while they looked at options to either split up or sell the business.

The retailer has been contacted for comment.

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