Ecommerce retailer Kogan.com has announced the acquisition of Dick Smith's online retail business that will see the brand run as an online-only consumer electronics retailer in Australia and New Zealand.
Under the deal, Kogan will take over the online business from June 1, 2016, following a transition period that will see Dick Smith close its bricks and mortar store network.
According to Kogan, it will handle customer information currently held by Dick Smith "in accordance with the requirements of Australian and New Zealand privacy law". This will mean all Dick Smith customers will be contacted and given the option to have their details removed before it is transferred to Kogan. However, Kogan assured customers who provided their information to Dick Smith after receivership on January 4, 2016 will not have their information disclosed.
Kogan.com founder and CEO Ruslan Kogan said the company will invest and build on the Dick Smith legacy.
"I remember as a kid always visiting Dick Smith to look for parts to upgrade my computer. There is a strong history of passion in the Dick Smith community for how technology can improve our lives, and we look forward to helping make it more affordable and accessible for all," he said.
The acquisition comes after Dick Smith entered into voluntary administration in early January. The retailer was unsuccessful in securing a funds injection from its banks after suffering financial woes on worse-than-expected sales and cash generation in December.
Chairman Rob Murray previously said the company explored alternative funding, but concluded it would not be secured in time if the business wanted to order inventory over the next four to six weeks.
As a result of this, Dick Smith expects to close 363 Australian and New Zealand retail stores that will see a total of 2,890 staff lose their jobs.
Dick Smith was sold by Woolworths for AU$94 million to private equity firm Anchorage Capital Partners in 2012. At the time, Woolworths noted that it spent AU$420 million on restructuring Dick Smith before it accelerated the process of selling it off to Anchorage. This was despite Woolworths having previously stated that Dick Smith's online presence was one of its more successful avenues for revenue.
At the time of purchase, Anchorage said it was going to support Dick Smith through additional cash investments and guarantees, and intended to keep all 325 stores, which employed 4,500 people throughout Australia and New Zealand. Anchorage also had intentions to expand the retail network.
A year later, Anchorage floated the company on the Australian share market at AU$2.20 per share, valuing it at AU$520 million.
In the same year, Dick Smith announced its adoption of Google Apps to aid communication and collaboration between its workers across Australia and New Zealand.
Linda Venables, director of IT at Dick Smith, said at the time that the use of Google products would help build a sense of community between employees and the company.
"We have been looking for ways to improve collaboration because, until now, communication in stores has been a hierarchical one-way process through the manager," she said.