Posts Tagged‘dick smith electronics’

Dick Smith Electronics in Dire Straits.

The year is 1999 and my parents have informed me that I will no longer be “spending their money”. This is their no-so-subtle way of telling me that I need to get a job if I want to keep doing the things I’m doing, like upgrading my PC every 6 months. I’ve already heard horror stories of my mates working at McDonalds and other, typical first time job places so I’ve set my sights elsewhere. To my surprise the first Dick Smith Electronics store I put my resume in at calls me back right away. No less than a month (and a few questionable training videos later) I’m out on the sales floor, a place I’d come back to routinely for another 6 years.

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So suffice to say that I have something of a soft spot for the electronics retailer, even long after it dropped the iconic branding and reputation for being the place to get electronic components and kits. Of course I had long knew about the troubles the company was facing, partly from online but also from their less-than-stellar own product brand. Things were looking up in recent times after they were bought out from Woolworths and then refloated on the ASX however it turns out that might have been the first turn in its current demise.

As it turns out the buyout by Anchorage Capital, a private equity firm, was a carefully constructed scheme to buy DSE for a song and then reap themselves a healthy profit. The whole blog is worth reading in its entirety however the pertinent details are thus. Anchorage “purchased” DSE for a total of $115 million however only $10 million of that was financed with actual cash. The rest was derived from writing down their stock holdings and then selling them off at fire sale prices. This generated them a huge operating cash flow which they then used to pay back the outstanding amounts to Woolworths. Then, prior to relisting DSE on the stock exchange, they used the previous write downs and projections from the clearance sales to forecast a believeable profit for the coming years. This is what allowed them to list DSE for some $525 million, all of which they were able to receive after selling all their shares in September 2014.

This, of course, didn’t leave the company in the greatest state something which was reflected in the share price which meandered around $2 until late last year. Then after their FY2014 earnings failed to meet expectations their share price began to tumble, losing almost 90% of its value. In a desperate attempt to stem the tide DSE then engaged in what many called a “suicidal” sale of their current inventory, hoping to win enough business during the christmas period in order to stay afloat. This, unfortunately, did not work and today they have requested that the ASX put a trading halt on their shares while they look to restructure their debt obligations.

Given this recent turmoil it’s going to be incredibly hard for DSE to find a willing debtor to pull them out of this grief. Previously DSE looked strong due to its lack of debt however the fire sales that Anchorage engaged in to pay back Woolworths left the company without the inventory it needed to continue business. This meant taking on debt in order to keep suppliers on the books, something which is fine if the sales are there to support it. However, as their fire sale over christmas has shown, they simply aren’t making the kinds of sales required to support that way of doing business and so we find ourselves in this current situation.

It’s a prime example of how corporate raiders can carve up a company for a large short term gain that cripples it in the long term. DSE always struggled against the bigger retail giants, especially when it branched out into their territory in early the early 2000s, but it was at least sustainable. Now it’s quite likely that DSE will end up in receivership, unable to finance its debt obligations leaving it incapable of continuing business. For a former employee it’s a sad thing to see happen and I sincerely hope I’m wrong about them being able to restructure their debt.

My Obsession With Well Engineered Things.

Of the numerous memorable experiences I had working at the once great Dick Smith Electronics chain (serving a pimp who paid with notes removed from a gold money clip shaped like a dragon being among them) there was one that really stuck with me. I remember a man coming into the store who was looking for spray to freeze components, something which we stocked back then. I’m not sure what started the conversation but I do remember at one point mentioning that you could use it to cool a CPU in a PC if you were so inclined although you wouldn’t have much time to run your benchmarks with just a single can. As it turns out he was an electronics engineer and me, being halfway through a computer engineering degree at the time, instantly hit it off with him.

Among the cooling talk it came up in conversation that I had just recently built myself a water cooled PC rig, mostly for the street cred I’d get from overclocking the bajeezus out of my AMD CPU. He laughed and remarked on how he no longer bothered to do that any more but he did say that back in his day he used to do the same thing. We then got on to talking about product quality and what he said after that, whilst not changing me immediately, stuck with me:

When I’m trying to figure out if a motherboard is good quality I’ll pick it up and look at the engineering went into it. You can tell if components are laid out logically, if there’s high quality components and heaps of stuff just by having a good look at it.

For someone who had fed himself a steady diet of reviews, forum posts and benchmarks to determine the quality of a product the idea of simply looking at something to determine the value seemed kinda strange, but I couldn’t get the idea out of my head. Over the years that idea grew into something of an obsession and I started to look at all the products I wanted to buy with an engineering eye. From there it’s grown into a passion for well engineered things and should anything cross my path that I can see has had a certain level of engineering prowess put into it I can’t help but feel myself be drawn to it.

The coffee machine pictured above (the Breville BES900 if you’re wondering) is the latest product to tickle my engineering fancy just right. Now I’m sure that sounds a little strange, I mean I’m no coffee geek and traditionally coffee machines are the most technically thrilling pieces of technology, but I was in the market for one and my highly experienced Melbourne friend (I have friends with coffee cred, see) recommended this one. Breville isn’t exactly the name you’d first associate with high tech either so on the surface pretty much everything about this was lining up to be a mundane adventure into the work of kitchen appliances.

I could not have been more wrong.

I can wholeheartedly attribute my current geek lust for this particular appliance to the hands on preview from the people over at CoffeeGeek. Whilst things like the boiler system, temperature controls and all the other bits that go into the coffee making side of it are impressive in its own right there’s a whole bunch of things that just scream good engineering. Overfill the reservoir on the top? No worries it has a drain into the spill tray in the bottom. Got the machine butted up against the wall but want to get to the back? There’s a switch on the bottom that extends wheels out so you can just spin it without having to lift the whole thing up. I really could go on but the guys at CoffeeGeek did a much better job than I could showcasing just how much solid engineering went into it.

And it’s pretty much for that fact only that it’s my current obsession. I don’t drink a whole lot of coffee and up until now my $10 special plunger has sufficed but every time I use it I can’t help but think about the beautiful piece of engineering I could be using instead. Soon one of them will find its way into my home (via those credit card points which are useless for pretty much everything except things like this) and I’ll be able to revel in its well engineered beauty in person. Until then I’ll satiate my inner engineering with specifications and pictures of its various bits and pieces, something which I never seem to get tired of.

Fire Sales: A Reflection From a Former Dick Smith Employee.

Long time readers will know that for a good chunk of my working teenage years, in fact the majority of them now that I think about it, were spent predominantly at the Dick Smith Electronics store in Fyshwick here in the ACT. For what its worth it out of all the jobs I had (I was working up to 4 at times) it was the best of the lot but that could have easily been due to my seniority at the place. In my time there though I was privy to many of the behind the scenes activities that the vast majority of the public are unaware of and it seems recently some of those activities have been called into question again.

The events I’m referring to was the massive game clearance sale that took place just last week. Due to consumer regulations the sale was not allowed to be made public, due to the stampede it would create, but a price list inevitably made its way online and the calamity that ensued had people wondering just what the hell was going on. A major part of this was the apparent disdain for the employees who managed to snag some of the bargains before the public were allowed to have a go at them, something which one current employee has gone a long way to address.

I figured that I might just throw my hat in the ring here as well.

Way back in the day you might remember the little bastard child of a gaming handset cross mobile phone that was the Nokia N-Gage. Dick Smith stocked them and I had the mixed pleasure of trying to sell them to potential customers. It was an incredibly hard sell, one that only worked on the few uber nerds that would seek it out and the cashed up parents who bought their kids the phones they wanted (rather than the ones they needed). Of course one day Dick Smith decided to have a sale on the handsets via a coupon for a modest discount. The wording of the coupon was kind of lax and the system allowed multiple coupons to be used against a single handset, dropping the price to a tantalizing $100.

It was bedlam,the instant that word got around our store was swamped with people looking to pick up on the bargain. We kept the store open well past its closing time in order to service the last few of the orders and nearly every customer walked away with the device they wanted. The benefit for us was that a few of us got to get one of these handsets as well, many of us who then used it as our primary handset afterwards. Indeed the vast majority of ones that we saw up on eBay came from customers who had just purchased them from us not hours before, not the staff who had put them aside.

I’d have more sympathy for the greater consumer market if a couple things weren’t the way they currently are. When I started Dick Smith employees got an amazing staff discount: cost price + 10%. Whilst it didn’t make everything cheaper (games and computers being chief amongst them) it was amazing for many of the things that a budding geek like myself lusted after. About 3 years after I started working there the discount was scrapped, changed to be in line with the greater Woolworths employee discount scheme of a flat 5% off (which we got as well, but could not use in conjunction with our other discount).

There’s also the fact that for the most part this was a clearance sale, I.E. a run out of current stock lines that have either failed to move during their regular sales run or are the last of a dwindling few remaining. The fact that the price list was leaked online prior to the event meant that everyone got the impression that there would be enough stock to satisfy everyone when that was clearly not the case. Had this been a regular run of the mill sale I might have sung a different tune but it wasn’t and, I shudder to say this, sounds like a lot of people acting like entitled little bitches.

Honestly I believe the staff are entitled to have first stab at these things (much like they were for the recent WoW Sight and Sound fire sales, hear anyone whining about that?) because they work there, plain and simple. Retail employees aren’t that well compensated and it’s little perks like these, which are few and far between, that keeps them working there. If you’ve got a problem with staff having first go at sales like these then you’re more than welcome to take up a casual role in order to get the same level of “privilege” that they do. That or you could admit your value proposition for the items in question is so far below the regular retail price that you probably don’t need nor want said item.

This has gotten a lot more ranty than I thought it would so if you’d like a more level headed opinion from a consumer perspective then this piece from Matt Williams is probably more up your alley.

Be Good to Your Salespeople.

My very first ever job was working for the Australian electronics chain called Dick Smith Electronics which I started at the tender age of 14. I got the job in a very serendipitous encounter as after being told that I was no longer allowed to spend my parent’s money (blowing a good $600 on a new computer) we had spent a day driving around to all the various first job places and handing in applications. For one reason or another I wanted to head over to DSE to look or buy something and the sign out the front said they were taking applications. My mother, managing to bypass the incredible amount of teenage angst and my then self defeatist attitude, encouraged me to apply. A couple months later saw me starting my first day of a job that would last 6 years making me the longest serving member at my shop, outliving 5 bosses and countless workmates.

In my time there I had my share of great and not-so-great encounters with various customers. After the first year or so of being a under-confident teenager working in a grown up world I started to come into my own as a technology obsessed geek who knew far too much about all the products in his store. It worked well for the store I was in as we would of attract those people looking for the forms of esoterica that we sold, mostly electronic components. I did my best to learn enough to get by when people asked for certain components and eventually became quite knowledgeable thanks to learning by immersion. That still didn’t stop some people for getting frustrated at me for not knowing something and this is where I started to take offense.

I thought I was pretty damn good at my job, especially after being there for 3 years. Customer complaints about my service were few and far between with only a single formal complaint ever being lodged. I also developed a reputation for being “that electronics guy at the Fyshwick store” who other stores would send problem customers to in order to get their problems solved. Sure there were times when I didn’t know something but realistically I was a teenager working in an electronics chain and I could hardly be expected to be an electronics engineer ready to solve every problem. That didn’t stop some customers from blowing their tops at me for not knowing a certain specification or refusing to design a circuit for them and that led me to develop a simple rule that I’ve applied in every shopping expedition I’ve been on.

It’s simply “be good to your salesperson”.

Working in retail is a pretty laborious job. You’re standing for a good portion of the day, have to deal with all sorts of people with varying levels of understanding of what they want and are expected to be an expert on everything in the store. Sure it’s by no means hard especially if you’ve got a modicum of interesting in the things you’re selling but as with any public facing position it seems like there’s a subset of society that’s out to make your life a living hell. Especially when you try to enforce a company policy that doesn’t seem all that fair but our hands are tied. We’re there to provide a service to you and most of us are good people trying to do a job. You don’t make that any easier if you come in with an attitude.

So whenever I’m out to buy something I’m usually pretty nice to the people serving me. You’d be surprised how far a little kindness can go with these people, especially if you’re coming in at a busy time of the year. The more the salesperson likes you the more likely you are to get a good deal too, as we don’t feel as bad giving discounts to genuinely nice people. Of course I also have a pretty strict rule of if they’re an ass to me I immediately walk away from the store as there’s no point favouring those who won’t return a little common courtesy.

If you’re involved in any form of sales, whether on the selling or receiving end, it pays to be an honest and genuine person with those on the other side of the fence. If you don’t think the retail stores don’t know enough to help you out then stick to online stores since you’ll get a better price, won’t have to deal with other people and won’t bother those poor staff who don’t know as much as you. However if you’re looking for a little bit of product knowledge and maybe want to have a play with a product before buying it remember, be good to those serving you and I’m sure they’ll respond in kind.