Kogan announced today, that it will be buying Dick Smith’s Online Store.
This is a massive deal for the Dick Smith business, as they are currently on a closing down sale that lasts 8 weeks from the 25th of February and being almost 3 weeks in as of time of writing.
Kogan says they will “continue the legacy” of the Dick Smith’s brand and keep the online business going as a “dual-business strategy” since Kogan’s business is online sales focused.
“Dick Smith is an iconic Australian brand and we’re thrilled to be able to keep it alive, as well as Aussie owned and run,” said Kogan. “We will invest in building and nurturing the Dick Smith community, and honour the great legacy of this Australian business.
“I remember as a kid always visiting Dick Smith to look for parts to upgrade my computer. There is a strong history of passion in the Dick Smith community for how technology can improve our lives, and we look forward to helping make it more affordable and accessible for all.”
The retail store network will continue to be shutting down and Kogan will own 100% of the online store business from the 1st of June 2016. This means Kogan will own:
- Online business.
- Goodwill and brand of Dick Smith.
No amount as been disclosed as to how much Kogan paid Dick Smith’s to buyout the online store division.
This all comes after Kogan announced back in January that they will honour the Dick Smith gift cards that people could not redeem.
It is not known at this stage (or from what I have read) if they will maintain all of the warehouses and delivery facilities that Dick Smith owns but more details should become available in the near future.
And this post leads me to what is perhaps the most important question in regards to Kogan buying Dick Smith’s online store:
“Will you buy anything from the Dick Smiths Online Store after Kogan acquires it?”
In my case, I barely buy anything online apart from cheap things on eBay, but everything comes down to price. Given that Kogan will not need to pay retail store rent, ship stock, manage stock less and I perhaps feel the most important reason, not have to pay as many staff wages as it will only be for one (maybe two) warehouses in Australia compared to 400 retail stores across Australia and New Zealand.
If all of these factors combined do not help reduce the prices for their online store, then I do not see the Dick Smith online store staying around that long.
From another perspective, if people see an item for example at JB Hi-Fi in store for a set price and it is the exact same price on Dick Smith’s online store, people will just go and buy it at JB because they can:
- Get it there and then.
- Be able to physically hold it before buying it (for small products at least).
- Easily return/exchange it if there is anything wrong with the purchase.
That all being said, it all comes down to pricing of products as to whether or not the Dick Smith Online Store will stay around for long or not after Kogan acquires it on the 1st of June.
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