Just a day after Ruslan Kogan invested an undisclosed amount to buy the Dick Smith Intellectual Property, the fallout from that chain’s demise is still dominating the media.
Kogan has swallowed the Dick Smith brand names, along with all trademarks and online operations and the names and address of over a million Dick Smith customers after a highly contested two-month auction.
This will be the first time Kogan (who is well-known for his eponymous brand) has sold a different brand. His reputation rests on his cheap homebrands and his aggressive online offers to existing customers.
“Dick Smith is one of the most iconic Australian retail brands and we will be able to leverage the millions of dollars we’ve invested into online retail systems and architecture over the last decade to sustainably run the business,” Kogan said yesterday.
Kogan also said suppliers who previously refused to supply Kogan to avoid a backlash from traditional retailers such as Harvey Norman and JB Hi-Fi might be more willing to supply DickSmith.com.au.
Meanwhile, Dick Smith customers have only been given a week to unsubscribe from the Dick Smith database and avoid being bombarded with offers from Kogan.
Yesterday, Dick Smith’s receivers and managers at Ferrier Hodgson sent emails to Dick Smith’s customers and subscribers in Australia and New Zealand offering them the opportunity to unsubscribe from the Dick Smith database by March 22.
“Unless you elect otherwise, you will continue to receive commercial messages from the new owners of the Dick Smith online business,” the email said.
The email also includes a link that requires customers to enter their names and email addresses to unsubscribe from the database.
“If you do not opt out by following the above link by 5pm on March 22, then the receivers will proceed on the basis that you authorise and consent to receive commercial messages from the new owners of the Dick Smith online business and authorise and consent to the disclosure of your information,” the email said.
The email follows widespread concerns about the privacy implications of selling the Dick Smith database. Some consumers who received the email feared it was a “phishing” exercise aimed at obtaining their personal information.
One recipient told the media that Ferrier Hodgson was not specifically named in the email, just these references: (Receivers and Managers Appointed) (Administrators Appointed). Others said they had received the email even though they had never bought anything from Dick Smith and had never signed up to a mailing list or loyalty program.
Ferrier Hodgson partner James Stewart said the receivers had liaised with the Privacy Commission in Australia and New Zealand to make sure customer privacy was protected.
“We are acutely sensitive to it. We want to make sure it’s sold the right way,” Stewart said.
Kogan is reported to be working with investment bankers UBS and Canaccord Genuity to prepare the company for an initial public offering in the second half of 2016. Notwithstanding the sale of Dick Smith’s online business, analysts at Deutsche Bank believe the retailer’s demise will boost sales at JB Hi-Fi by about 10%, or almost $400 million, Harvey Norman’s sales by 6%, or $330 million.
This story first appeared in Appliance Retailer.