Dick Smith collapse: what we know and what we don't

What we don't know

'Real fire sale’?

Dick Smith has discounted all of its products by 20 to 40 percent since the closure announcement. However, Lifehacker reported that will continue to drop incrementally over the next eight weeks or until stock runs out.

Unsecured creditors?

McGrathNicol provided a breakdown of secured and unsecured creditors, but are yet to reveal exactly who is claiming and how much for. Fairfax reported that distributors Ingram Micro and Synnex could be among the biggest creditors. Mobile distributor Cellnet also reported a hit to revenue from the collapse.

Mac1?

The administrators told creditors it would be best to sell the Apple reseller business that Dick Smith acquired in 2014. During the same meeting, administrator Joe Hayes advisted that if any of Dick Smith’s companies were wound up, every creditor of Dick Smith also becomes a creditor to Mac1.

At the time of the meeting, Mac1 had 13 service desks inside Dick Smith stores and only two dedicated retail locations.

[Update] On 6 May, McGrathNicol announced it had entered a deal to sell Mac1 to Harvey Norman, including most of its assets and staff.

Investigation?

A number of industry watchdogs have already began looking into how the collapse came about, and why Dick Smith could not honour gift cards.

Independent senator Nick Xenephon called on the Australian Competition and Consumer Commission to look into the collapse and asked the Australian Securities and Investments Commission why they did not see the fall coming.

Market conditions?

Dick Smith’s biggest competitors – JB Hi-Fi and Harvey Norman – appear to have carried on with business as usual. Both companies reported strong financial results for the half financial year ending 31 December, before Dick Smith entered administration. We may have to wait until their full year results are revealed in August to see if Dick Smith’s closure has had any material impact.

What’s next?

The administrators have delayed the second creditors meeting until 9 August, so we could be waiting until then to see who is owed and how much.