Woolworths to sell struggling Dick Smith chain and close 100 stores

Woolworths has signalled that it will sell off the troubled Dick Smith chain following a structural review of the business, also announcing that it will close up to 100 stores over the next two years.

The announcement comes after an analysts' report from CSLR that predicted the company would close over 100 stores in the chain.

According to a statement this morning, Woolworths said that its consumer electronics chain will remain important for Woolworths through its Big W chain and its multichannel offer.

"A strategic review, announced in November 2011, concluded that Woolworths' main strengths are primarily in larger format, multichannel, high volume retail segments with market-leading positions," the company said in a statement.

"The future of the Dick Smith business, which is profitable, experiencing positive sales growth and has a strong brand position, could be better realised through new ownership."

The review found that investment and management attention given to Dick Smith "has been disproportionate relative to its position within the Woolworths' group".

With the company now focused on increasing activity in core trading divisions, the company agrees separating the model from the company is the best option.

"A divestment of Dick Smith will enable the Woolworths group to focus more investment on serving customers in its core business with a strong multichannel offer, backed with market leading fulfilment systems and an effective store network," chief executive Grant O'Brien said in a statement.

Staff affected by the closures will be moved around in the Woolworths group, the company said.

Recently CSLA analysts David Thomas and Richard Barwick suggested Woolworths close 190 Dick Smith stores.

This article originally appeared on SmartCompany.




Be the first one to comment on this article
What would you like to say about this project?