Dick Smith Electronics acquires Mac1 for one dollar

Dick Smith Electronics will continue to review the business of east-coast retailer Mac1, after acquiring the long-time Apple reseller late last year and hiring its founder.

It is understood that hiring Mac1 founder Kenneth Hogg was central to the deal; Hogg will now drive Dick Smith's education business.

Dick Smith Electronics actually acquired the Apple network back in September, in a deal that was not announced to the media. Documents detailing the change of ownership show Dick Smith Electronics become the ultimate holding company on 22 September after buying all the shares for $1. 

Mac1's beginnings go back to 1990 in Canberra, with the reseller's website currently listing seven stores, in Canberra, Hobart, Albury, Armidale, Newcastle, Wollongong and Brisbane. It also provides Apple servicing, as well as having an education business with account executives in Queensland, New South Wales, the Australian Capital Territory, Victoria and Tasmania.

Dick Smith is looking to maximise the return from the brand name, said director of investor relations David Cooke. He pointed to the opening of a Mac1 service centre in a MacArthur Square store at Campbelltown in Sydney as a case in point.

"We've closed some stores which weren't performing to our expectations and are looking to improve the performance of the remaining handful of stores. We will review their performance as the leases are up for renewal, as we do with all our Dick Smith stores," Cooke told CRN.

Education opportunity

The main aim was bringing onboard Hogg, with his knowledge in the education sector, Cooke said. "It wasn't a case of we bought Mac1 and got Ken. It's the other way around."

The move could be seen a way to combat rival JB Hi-Fi, which made major inroads into the education sector through the acquisition of Network Neighborhood. Last year, JB Hi-Fi rebranded the education business and announced plans for a BYOD portal for parents.

Cooke added: "Dick Smith decided a while ago to improve the quality of our sales in the education sector, which is part of our commercial sales arm. The expertise and know-how of Ken was considered attractive in assisting our growing sales profitably and sustainably in that space." 

He said Hogg's expertise and contacts had helped Dick Smith replace some one-off education sales with more recurring sales. Dick Smith is also hoping to capitalise on the BYOD trend in education.

"It used to be a few years ago that schools would do the buying of computers for their students on a wholesale level, but increasingly it's bring your own device. And that's Dick Smith's forte," he said.

Mac1 is not the only Australian Apple retailer with multiple stores to be acquired in the last six months. Sydney and Melbourne business MyMac is set to be acquired by investment firm Broad Investment this month.