Transcription of Finance News Network Interview with Dick Smith Holdings Limited (ASX:DSH) CEO & Managing Director, Nick Abboud
Hello I’m Lelde Smits for the Finance News Network and joining me from electronics retailer Dick Smith Holdings Limited (ASX:DSH)
is its CEO & Managing Director, Nick Abboud. Nick, welcome to FNN.
Nick Abboud: Thank you.
Lelde Smits: Dick Smith listed in December last year. How is the company different now to what it was then?
Nick Abboud: It’s a very different company, it’s more profitable, we’ve grown the business considerably, we’re a much larger organisation through our retail store network, our online is much larger and we’re probably going to the market in a way that we are enticing consumers to buy office equipment, which is our focus category in the market, much better than twelve months ago.
Lelde Smits: You recently beat your prospectus sales guidance and remain on track to meet full year profit guidance. What have been the drivers behind your result?
Nick Abboud: Look, we’ve stayed focused on the key parts of our business so trading very strongly through our retail store network. We have ensured we have a very good tax time program for our customers. We have offered very good computer offers, very good phone offers pre-tax time and that’s really worked for us.
Lelde Smits: Dick Smith has set some ambitious targets for the future including doubling online sales in three years. Where do you think the company’s best growth prospects lie?
Definitely in the online space. So we’ve merged our online with our store network, so visualise 400 stores in FY2015, visualise different retail channels that we’ll operate through so online will have an eBay website, a Dick Smith website, a David Jones Limited (ASX:DJS)
website. So we actually communicate to different customers across Australia and New Zealand. So, our strength will be to use our store network, we’re very convenient in the market place, leverage our online through click and collect or through freight through the nearest store to that consumer and we think we will have an advantage against our competitors.
Lelde Smits: What is the size of the company’s current retail store network and your plans to expand?
Nick Abboud: Yes so today, we’re at 377 stores, our expansion vision that we’ve got over the next three years is 450 retail stores. We actually know where we want to go with those stores, so it’s about getting the right rental deal over the next three years.
Lelde Smits: You’ve also just come back from a road show in Asia. What are your growth aspirations in the region and how where they received?
Nick Abboud: Look, across Asia, they are very interested in Australian businesses, especially in the retail space. I think they’re excited about our growth aspirations that we have for the business. They understand the Dick Smith history of 44 years in the Australian and New Zealand market, so there is an appetite for the Dick Smith business and we’re pretty excited about continuing to go back to Asia and communicate our strategy.
We’ve just seen Dick Smith team up with Vodaphone under a retail agreement and Quickflix Limited (ASX:QFX)
for a marketing partnership. How did the deals come about?
Nick Abboud: We’re looking at different opportunities across the market, we communicate to different businesses all the time about opportunities where there are win-win opportunities. David Jones is a great example, Vodafone’s another one, so we’ve got probably a number of others that are in the pipeline and as they come to fruition we will communicate those.
Lelde Smits: Retailers have had a tough run following May’s Federal Budget. How are you positioning Dick Smith to whether weaker consumer confidence?
Nick Abboud: Dick Smith is a great brand, I think what consumers are looking for is value around the products they are interested in. We’ve got to make it easy for the consumer, whether it’s delivering to their home or shopping online. I think being in stock is another one. There are many key points in retailing that ensures you are successful versus your competitor. So, we’re focussing on the basics of those and that’s got us through FY14 and we see that getting us through FY15.
Lelde Smits: Finally Nick, what is your growth strategy for Dick Smith over the long term?
Nick Abboud: Our strategy is pretty clear. We’re going to be growing our store network, so 450 stores over the next three years, we see our online being ten per cent of the sales and our total private brand mix probably ending up 15 per cent, it’s 11 per cent today, and that allows us to be more competitive on prices because we’ve got strong margins through our private brand division.
Lelde Smits: Nick Abboud, thank you for the update from Dick Smith.
Nick Abboud: Thank you.