Outgoing Dick Smith chief executive Nick Abboud gets no payout

Embattled retailer Dick Smith has replaced its chief executive, strengthening speculation that a buyer for the chain can be found.

Nick Abboud tendered his resignation on Monday night and receiver Ferrier Hodgson said on Tuesday it had installed former Retail Fusion Brands boss Don Grover as interim CEO.

Dick Smith CEO Nick Abboud was appointed by Anchorage in 2012.
Dick Smith CEO Nick Abboud was appointed by Anchorage in 2012. Photo: Louise Kennerley

Mr Grover is a 30-year retail veteran who as Fusion CEO oversaw footwear chains Diana Ferrari, Williams, Mathers and Colorado, and has previously headed up bookseller Dymocks as well as holding a number of roles at David Jones.

Forager Funds chief investment officer Steve Johnson said that it was not unusual for the boss of a collapsed business to quit, but he was surprised that Ferrier Hodgson chose to appoint a new chief executive rather than run Dick Smith itself.

Dick Smith's interim chief executive and former Retail Fusion Brands boss Don Grover.
Dick Smith's interim chief executive and former Retail Fusion Brands boss Don Grover. Photo: Luis Ascui

"It's probably a positive sign, that if someone's been convinced to take the job they've been convinced that there's going to be a job there at some point [in the future]," Mr Johnson said.

"My guess would be there's been at least some degree of due diligence done and there's some chance this business is going to be sold to someone at some point as a going concern."


Another market analyst, who asked not to be named, said Mr Abboud's resignation was not surprising given Dick Smith would likely be a trade sale.

"Under a trade sale the purchaser will likely have a preference for how they would run the business," the analyst said.

The collapse of Dick Smith has threatened 3,300 jobs in Australia and New Zealand.
The collapse of Dick Smith has threatened 3,300 jobs in Australia and New Zealand. Photo: Edwina Pickles

A source close to Dick Smith said Mr Abboud was "incredibly regretful" about the company's collapse and had offered to "make himself available" to help Ferrier Hodgson sell the business as a going concern.

"He is particularly concerned about the uncertainty created for both the company's shareholders and the company's staff," the source said.

Mr Abboud took the reins when private equity firm Anchorage Capital Partners bought the company from Woolworths in November 2012 for $115 million.

He steered a massive turnaround at the company, which floated on the stock exchange for $520 million just over a year later.

As Dick Smith's second largest shareholder, Mr Abboud lost a small fortune through the company's collapse: his 15.3 million shares were worth $34 million when the company floated but had fallen to $5.4 million when Dick Smith entered administration last week.

Mr Abboud won't receive a payout and will walk away with only his final day's salary.

Peter Wuchatsch, analyst at remuneration advisory firm Ownership Matters, said Mr Abboud's base salary of about $1.25 million had been reasonable relative to his peers.

Mr Abboud received 10 per cent of his maximum performance bonus in 2015 leaving him with a total remuneration of $1.4 million, down from a $2.6 million package in 2014, which Mr Wuchatsch said "aligned well with the performance of the company".

Dick Smith's former owner Anchorage has been accused of pulling off a "heist" by liquidating Dick Smith's stock to boost sales and cover the cost of acquiring the company from Woolworths, making a $370 million net profit from its 15-month involvement in the process.

But Mr Wuchatsch said the near $30-million wipe-out of the value of Mr Abboud's shares showed he was not part of such a strategy.

"He certainly didn't cut and run when he first made a profit ... he remained aligned with shareholders the entire time [and] he's been hurt financially a significant amount," Mr Wuchatsch said.

New CEO Mr Grover, who started work at Dick Smith last week and is the cousin of the company's former CEO Jeff Grover, was not available for comment on Tuesday and Ferrier Hodgson would not discuss the nature of his employment.

Ferrier Hodgson said on Tuesday it had received more than 40 expressions of interest from potential buyers for Dick Smith's 393 stores in Australia and New Zealand.

The company owes about $140 million to its banks and another $250 million to unsecured creditors, the receiver confirmed on Tuesday.

Rival electronics chain JB Hi-Fi, which has been tipped to snare an extra $200 million in sales a year due to Dick Smith's decline, was the ASX200's best-performing stock on Tuesday and gained almost 7 per cent.

Administrator McGrathNicol has called the first creditors' meeting to be held in Sydney at midday on January 14.