Dick Smith overhaul reaping rewards: Woolworths

Dick Smith overhaul reaping rewards: Woolworths

Woolworths continues to overhaul its consumer electronics business Dick Smith as it seeks to reposition the brand in the Australian and New Zealand markets.

The company has rolled out a new format to its Dick Smith stores across the two countries with 117 stores converted to date, representatives told a shareholder presentation. It expects to convert 168 stores by the end of the 2010 financial year.

A refresh of its online site in August has resulted in increased customer trading, the launch of its “Techxperts” delivery and installation service is gaining traction with customers and sales and customer service staff have been retrained, according to the company.

The New Zealand arm reported a 2.1 per cent year on year sales decline to A$187 million, gross margin of $26.42 million up from $25.1 million, and an EBIT decline of 28 per cent to $9 million, down from $12.5 million. However, the changes have resulted in modest sales increases in Australia, with the Australian arm of the consumer electronics business reporting a 4.3 per cent year-on-year increase to $710 million for the half to 31 December 2009.

Gross margin was $27.5 million, up from $25.72 million in the corresponding period, and EBIT was 27.5 million, up 28.5 per cent from $21.4 million over the same period.

Online sales at the wider Woolworths-owned business’ sites increased 41 per cent year-on-year, driven by solid performances from the Dick Smith and supermarket sites, according to the company.

Woolworths has invested in several IT projects during the half, and reviewed its IT programme and reprioritised projects.

Woolworths recorded an overall net profit after tax of just over $1 billion for the half, up 11.4 per cent year-on-year, and sales of $27.2 billion, up 6 per cent year on year.

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