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Dick Smith creditors look for answers – and money

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Technology distributor Synnex Australia is believed to be among the ranks of creditors who will attend the Dick Smith Holdings creditor meeting on Thursday  looking for answers over debts totalling more than $200 million.

The creditors list is not expected to include many of the high-profile electronics brands, such as Apple and Samsung, which demanded cash-on-delivery terms from Dick Smith.

But the distributors of second-tier labels as well as the unbranded products Dick Smith sold under its own name weren't as lucky.

Synnex​ and Ingram Micro Australia are both active in this space and are understood to be owed money by Dick Smith.

Administrator McGrathNicol would not comment on any of the creditor details before the meeting at midday in Sydney.

Ingram Micro was not talking on Wednesday and neither was Synnex but industry insiders suggest Synnex could be owed millions.


Synnex's turnover was headed towards $2 billion for the 2015 calendar year and the company is understood to have experienced strong revenue growth in the past couple of years.

One of Synnex's smaller competitors said there was talk the operation might take a "big hit" on Dick Smith.

"This is the scariest one [business failure] I have ever seen, it's directly affecting the IT sector because the sector has the lowest margin products in the country," he said.

Multimedia Technology chief executive John Hassall said margins of between 5 per cent and 6 per cent were quite common among tech distributors in Australia but some bigger operators were working on even lower numbers.

"For some of the large volume businesses, I believe there are vendors working on 1 per cent, 2 per cent or 3 per cent margin," Mr Hassall said.

"I'm the chief executive of a $100 million [turnover] company and to me, running a 2 per cent margin business is a great way to go broke."

Multimedia Technology has not supplied product to Dick Smith for about six months and it is not a creditor.

In addition to the product suppliers the major retail landlords including Westfield owner Scentre Group and Vicinity Centres are among Dick Smith's largest creditors.

Receivers Ferrier Hodgson took control of Dick Smith's 393 outlets in Australia and New Zealand last week at the behest of its bankers National Australia Bank and HSBC following the appointment of administrators.

The listed business was hit by two profit downgrades late last year as well as a $60 million stock write-down in November that sent its shares trading as low as 20¢, down $2 from its $2.20 listing price.

A fire sale in the lead-up to Christmas failed to deliver the returns Dick Smith so desperately needed and its bankers, which are owed more than $140 million, appeared to lose patience last week – a move that caught many, including senior staff, by surprise.

Ferrier Hodgson revealed earlier this week that more than 40 buyers had already expressed an interest in the business and the chain's former marketing director Gary Johnston has already put his hand up for a number of the Dick Smith premises.