No plans to list Dick Smith
Private equity-owned Dick Smith Electronics has played down rumours its owners are already looking to sell the business, saying it hopes to improve performance and expand the brand before exiting.
Speaking on the company's business strategy for the first time since its private equity takeover last year, chief executive Nick Abboud said the brand - which operates in one of the most highly competitive online markets, technology - was in a "powerful position" given it had no core debt.
"Anchorage (Capital) are very confident with the strategy that management have put into the business. It allows us to look at many options - and one of those would be an IPO," he said. "The timing of that - obviously we need to perform for a period of time. Once we get some runs on the board then we will allow a wider market to get involved."
Woolworths, which sold the business to Anchorage for $20 million in 2012, announced it had severed ties with the retailer completely after it agreed to take an advance payment of $94 million from Anchorage instead of a percentage of profits if the business was later sold.
Mr Abboud said this large cash payment and the fact that the company had no debt signalled the health of the business. "In eight months we've been able to turn [Dick Smith] around," he said.
"We've had a lot of cash in the bank, and the management team are confident about where we're going to take the business."
Mr Abboud took up his role at Dick Smith after a 19-year stint with Myer, where he finished as the company's executive general manager. During this time he oversaw the business when it was under the control of private equity firm TPG.
Anchorage, which specialises in poaching underperforming business and turning them around for a profit, signalled in April that it had put another retailer - Colorado - up for sale less than two years after it wound the business up with co-owners Ice Canyon. The group swooped on the Dick Smith brand in September 2012, when Woolworths agreed to sell it for roughly the same price it had paid founder Dick Smith for it years earlier.