In August David Jones handed control of its loss-making consumer electronics business to Dick Smith, which at the time was owned by private equity, in a three year deal. It was one of the final deals put in place by Mr Abboud as he prepared the Dick Smith business for its public float.
It gave Dick Smith quick access to up to 30 David Jones department store sites as part of its wider strategy to roll out just under 80 stand-alone Dick Smith stores over the next three years.
Meanwhile, Dick Smith is also pushing ahead with the roll out of its new store brand ‘Move’, with the second Move store to open in Melbourne’s new Myer Emporium site this week after a successful launch of the retail concept in Sydney’s Westfield shopping centre at Bondi Junction in October.
Move, partly created by Mr Abboud, is a specialist mobile and wireless device retailer that fuses fashion and technology and sells a range of on-trend tech products such as stereos and headphones as well as accessories designed by fashion designers.
Mr Abboud said Dick Smith had a target of opening 30 Move stores over the next few years with its third store to open at Highpoint (VIC) in April and a fourth at Indooroopilly (QLD) in May.
”We are pretty confident we can get to that 30 number in the next couple of years,” Mr Abboud said.
And there could be up to ten Move stores opened in one deal after early discussions with shopping centre landlord Westfield.
”We travelled around Australia with Westfield and there are ten locations in Westfield shopping centres that we have identified and we are just negotiating now, so if all that goes to plan we could be signing 8 to 10 stores in one go.”
Tagged by some retail insiders as “fash-tronics”, or technology with style, Move is a small-format store, around half the size of a typical Dick Smith, that is expected to appeal to younger shoppers, especially females, who are looking for functionality but also like to make a fashion statement with their mobile and technology accessories.
”It’s a real fashion/electronics collaboration and it’s more targeted at an affluent female, so we wont open these stores in a C demographic they will be A, B+ demographic locations.”
Move will sell a range of mid-priced to upper-end products such as wireless headphones, iPads, speaker docking stations and mobile phone cases, and shoppers will be able to customise their purchases. The Sydney store is selling limited-edition smartphone accessories by Australian designer Romance Was Born, and has an oyster-case iPhone cover at $169. One of the store’s highest priced items is a Bang & Olufsen stereo with Spotify connected selling for $2690.
Mr Abboud said the Move store was very productive in terms of generating earnings, delivering higher margins per square metre than a Dick Smith store.
He said it was the right time to launch Move and roll out the store in Australia despite tough retail conditions characterised by a pull back in consumer spending.
”If you look at most successful businesses they seize the opportunity in tougher periods,” Mr Abboud said.
He said the company had managed to extract good deals from landlords at the Myer Emporium site when it came to rent and financial support for store fit out which made overheads lower. He was hopeful of similar deals with Westfield.