Updated Troubled gadget retailer Dick Smith Electronics is teetering on the brink, with banks sending in receivers after the company requested a trading halt.
The company has appointed McGrath Nicol as its voluntary administrator, and lenders HSBC and NAB have sent in Ferrier Hodgson's James Stewart as receiver.
Dick Smith Electronics had hoped to turn its operations around during the Christmas sale period, but its heavy discounting strategy failed to impress shoppers.
Originally the eponymous child of founder Dick Smith, who set the business up in the late 1960s to sell electronic parts to hobbyists, it was acquired by retail giant Woolworths in 1980 and grew to hundreds of stores.
After closing 100 stores, Woolworths decided to exit the struggling business in 2012, selling it to private equity firm Anchorage Capital Partners. At the time, Vulture South noted the AU$20 million “initial cash proceeds” from the sale was probably less than the value of in-store inventory.
Anchorage then re-floated the business in 2013 for $520 million. Funds manager Forage Funds Management last October called the Anchorage deal "the greatest private equity heist of all time". ®
Update: After this story was published, Ferrier Hodgson announced that gift cards will not be honoured, and deposits on purchases cannot be refunded. ®