Woolworths sells Dick Smith Electronics to Anchorage Capital

Anchorage and Woolworths have entered into an agreement that will see the capital group fully own the electronics retailer by November this year.

Woolworths stated in an announcement on the Australia Securities Exchange (ASX) this morning that "initial cash proceeds will be AU$20 million to be received in FY13, with Woolworths potentially benefiting from any upside resulting from a future sale of Dick Smith by Anchorage."

It has spent AU$420 in the past year restructuring DSE and moved to accelerate the process in January this year, when it flagged that it may place DSE up for sale, even after stating (just six months) earlier that Dick Smith's online presence was one of its more successful avenues for revenue.

Despite the benefit to Woolworths from a sale, Anchorage appears to have purchased DSE for the long haul. It has stated that it will support DSE through additional cash investments and guarantees, and intends to keep all 325 stores, which employ over 4,500 people throughout Australia and New Zealand. It is also considering where it may expand its retail network, as appropriate.

Heading up the changes will be former Myer Executive Manager of Operations Nick Abboud, who will be appointed CEO when the acquisition is completed. DSE's executive board will also include Anchorage chairman Phillip Cave, Anchorage partner Michael Briggs and Bill Wavish, who formerly worked with Abboud at Myer as its chairman and held the Finance Director position within Woolworths.