The collapse of Dick Smith has been
widely reported including the fact that
gift vouchers will not be redeemed. So that $200 voucher grandma bought you for xmas is now worth nothing... I find that morally bankrupt.
Investors should take a close look at investment firm Anchorage Capital who bought Dick Smith from Woolworths in 2011 for $115 million, with just a $20m deposit, then floated it with a
capitalisation of $520 million less than two years later. The company was never worth that figure and commentators are suggesting that
financial jiggery pokery (refer "What went wrong?" panel - bottom of page) -- smoke and mirrors accounting -- was used to inflate the company's value.
Googlybear pointed out in April that Dick Smith's foray into TradeMe sales didn't start well, and
it got worse from there.
- dicksmith-feedback.png (18.26 KiB) Viewed 1563 times
To operate a TM store you need to maintain "98% or greater positive feedback", but DS quickly dropped below that and never recovered. I wonder how many TM users have ended up out of pocket as a result of TM not policing their own policies? At least 16 red faces have appeared since the start of December, and that number is likely to increase as non-deliveries continue.
Maybe it's time for TradeMe to revisit their store policies. For a start, they could enforce their own rules in a timely manner as soon as any store starts to fail.
Update: Forager Funds Management aren't mincing words.
Sorry Dick Smith investors, you’ve been had.
