Dick Smith Moving to a new beat
Electronics chain Dick Smith believes the local market could support as many as 30 of its Move concept stores - a specialist mobile and wireless device retailer that fuses fashion and tech - as the group prepares for its $600 million sharemarket float slated for as early as Christmas.
The introduction of the Move stores, with the first recently opening in Sydney's Westfield shopping centre in Bondi Junction, is a crucial plank in chief executive Nick Abboud's strategy to target three key consumer segments. It sits alongside his pitch for the average shopper through Dick Smith-branded stores, and more affluent consumers via its deal with department store David Jones.
"It's an important part of having the three streams of customers," Mr Abboud said. "We have the Dick Smith customer, the David Jones customer and the Move customer, which is a younger male and female demographic in a product range that is more fashionable, and accessories to go with high-end technology."
Tagged by some retail insiders as "fash-tronics", or technology with style, Move is a small-format store that is expected to appeal to younger shoppers who are looking for functionality but also like to make a fashion statement with mobile and technology accessories.
Move will sell a range of mid-priced to upper-end products such as wireless headphones, iPads, speaker docking stations and mobile phone cases, and shoppers will be able to customise their purchases. The Sydney store is selling limited-edition smartphone accessories by Australian designer Romance Was Born, and has an oyster-case iPhone cover at $169.
"Move will have mid to upper ranges, so you will have Bang & Olufsen, some key brands and accessories. It's a very younger, feminine store," Mr Abboud said. "There are between 20 and 30 locations that you could do them in but you wouldn't do any more than that."
Dick Smith executives believe Move will attract brand-conscious consumers willing to buy high-priced tech goods but don't have a place where they can get their tech fitted to their style.
The typical Move store will be just 150 to 200 square metres but productive in terms of earnings and margin thanks to the high-end brands it will carry.
"And it's a very productive store, because what you have got is big-ticket items that will be highly productive in a small footprint," Mr Abboud said. "The store fitout is world class; we will be putting it forward for a number of awards. It's pretty out there."
It is reported that the fit-out will extend to the sounds and smells that fill Move stores, with staff able to trigger different aromas in the shop to mirror a change in themes, with the music also changing to fit the time of day.
It is expected the second Move store will open in Melbourne's Emporium shopping centre.
Private equity bought Dick Smith from Woolworths for $20 million last year and could be in line for a huge payday if they can get away a float for the electronics chain before Christmas. Dick Smith rang up pre-tax earnings of $80 million in the year to June, more than double the $36 million reaped in its last year under Woolworths' control.
The sharemarket float could be worth as much as $600 million.