Dick Smith takes over DJs electronics

Dick Smith Electronics will take over the management of retailer David Jones electronics’ businesses under a new agreement announced today.

The new "retail brand management agreement" will cover 30 stores nationwide and see David Jones' electronics department renamed David Jones Electronics Powered by Dick Smith. 

The deal will cover computers, tablets, televisions, home office and audio-visual, David Jones told investors today. It excludes whitegoods and small appliances.

The arrangement comes into effect on October 1. Dick Smith will acquire all existing related David Jones inventory, fixtures and fittings, and DJs front-line retail staff will also transition across to the Dick Smith business.

“It’s a win-win for both companies. Dick Smith is expanding its network and reaching a wider, high-end customer base, while David Jones is increasing its product and services offering for its customers," Dick Smith CEO Nick Abboud said in a statement.

"It also strengthens Dick Smith’s buying power, which in turn allows for more competitive prices for customers across both stores."

Along with physical retail, Dick Smith will be responsible for fulfilling all electronics orders placed on the DJs website via a drop ship model - DJs staff will take the order while Dick Smith is responsible for picking, packing and dispatch to the customer.

Dick Smith will pay DJs a fixed percentage of sales each month. The deal has been underwritten by Dick Smith so DJs will be paid a minimum monthly amount regardless of sales volumes.

The agreement runs for three years with a subsequent 12-month renewal period.

The deal comes as Dick Smith implements a company turnaround, initiated in September last year when the retailer was bought out from former owner Woolworths by Anchorage Capital Partners.

As part of the turnaround the retailer recently announced it would use its 323 stores as fulfilment centres for internet orders. 

The company is aiming to increase store numbers to 400, and form retail relationships with Apple and Samsung based on a "store within a store” strategy.

The company has also built a Hong Kong sourcing centre to take care of $150 million in product.