Dick Smith to take over DJs electronics
A new deal, which takes effect from October 1, will see Dick Smith take over the existing David Jones electronic business under the banner, David Jones Electronics Powered by Dick Smith.
The retail brand management agreement, (RBMA) will cover televisions, computers, tablets, home office, audio visual, and other digital products. Whitegoods and small appliances will continue to be managed by David Jones.
Under the agreement, Dick Smith will acquire DJs electronics inventory as well as fixtures and fittings, with front line staff also to transfer over to Dick Smith.
The value of the deal has not been disclosed. In addition to the operation of the electronic business instore, Dick Smith will also be responsible for fulfilling all electronic orders made through David Jones’ e-commerce site, via a drop ship model.
The initial agreement term is three years, with three 12 month options to renew. DJs MD, Paul Zahra, said the agreement will drive increased foot traffic into stores as it leverages the 6 million catalogues distributed by Dick Smith each week.
“It will deliver a boader range of electonic produxts to our customers at more competitive prices, while maintaining the David Jones shopping experience,” Zahra said.
“For some time we have reported on the challenges that our electronics business has faces, including deflation and aggressive discounting. The category has adversely impacted our sales and profit for a number of years now.
“As part of our Future Direction Strategic Plan, we stated that we would review all of our underperforming categories, and electronics was one such category. Our agreement with Dick Smith enables is to remove the risks associated with this business and preserve our ability to participate in the sales and profit upside that results from combining both our businesses.”
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