Woolworths to cut Dick Smith stores

[rochedalescan]

RETAIL giant Woolworths has confirmed speculation that it will divest it's Dick Smith chain.

http://www.couriermail.com.au/business/ ... 6257903440

WOOLWORTHS is tipped to cut its profit guidance today amid mounting speculation it will close almost half of its struggling Dick Smith chain.

The retail giant is expected to revise its profit guidance issued last year for a 2 - 6 per cent increase in 2012, as analysts say poor consumer confidence and price deflation will have hit the December quarter sales figures released today.

"I think there's a very real possibility the company will revise its earnings range down," City Index's chief market analyst Peter Esho said.

"If Woolworths can confirm that 2 - 6 per cent range it will receive a lot of support, but if not, we could see a big reaction as analysts and then investors hose down their expectations."

Woolworths announced a strategic review of the Dick Smith business in November, with market experts last week predicting the company could close nearly half of its 386 stores. The move would result in hundreds of jobs on the line.

Dick Smith contributed pre-tax earnings of $17.8 million in the last financial year, at a profit margin of 1.4 per cent compared with 6.6 per cent margin reported by the supermarket division.

"The best thing chief executive Grant O'Brien can do is cut Dick Smith," Morningstar's head of equities research Peter Warnes said. "It's been a millstone for the company and is an absolute distraction."

He is tipping overall sales could be up by as much as 4.5 per cent, mainly driven by higher petrol prices.

But he expects rival Coles to yet again gain ground, tipping the supermarket will have sales growth of about 1 percentage point higher than Woolworths when it reports on Thursday.

Woolworths yesterday announced three new non-executive directors.

Michael Ullmer, retired deputy group chief at National Australia Bank, will join the company, along with David Mackay, a former managing director of Sara Lee Bakery. The third appointment is Christine Cross, a former Tesco executive who runs a retail advisory consultancy.

[AIRMAN]

Good bye DSE

Hello Tandy

[rochedalescan]

I think what killed DSE was them getting out of spare parts/components. Sure you are not going to make alot of money out of it but your going to have people coming back for more ..

[Comint]

Hello Tandy

Not Likely.

Tandy is also owned by Woolworths, and a lot, if not all, of the Tandy stores have been re-branded as Dick Smith stores in recent years.

--
Comint

[dags]

well looks like jaycar will get bigger as long as they dont go down the same path as dse

[jaskel]

id say profits are down due to the douche bags they hire, i can never get service when i am in there, they tell me the wrong thing...idiots!

[jaskel]

yep, I scored some phillips headphones 60% off, a tomtom for 80% off and some mp3 players for 70% off

[Stretch]

Can't wait till they do specials up here


Cheers,
Mitch
Sent from my iPhone using Tapatalk

[TMBAscan]

One in Toowoomba is biting the dust, cnr of Ruthven and Bowen. They have said that it will close its doors in approximately 6 weeks. They do have some really good markdowns at the moment just to clear stock.

They have told employees that where they can, the will transfer them to other stores, but for any up here, that is a move to another city.

The one that is closing down was only 2 shops up from WOW, so now the block is like a ghost town.

[Stretch]

They just moved into a much bigger store at Robina....


Cheers,
Mitch
Sent from my iPhone using Tapatalk