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Dick Smith to operate department store chain David Jones electronics business

RBR Staff Writer Published 12 August 2013

Dick Smith Electronics has inked a retail brand management agreement (RBMA) with Australian department store chain David Jones.

As per the terms of the agreement, Dick Smith will, starting from 1 October 2013, will acquire David Jones' electronics inventory and the related fixture and fittings, and will operate the business as 'David Jones Electronics Powered by Dick Smith'.

The electronics products included under the RBMA comprise televisions, computers, tablets, home office, audiovisual and other digital products.

Throughout the RMBA, the electronics retailer will make monthly payments based upon a fixed percentage of sales from the business to David Jones.

The initial term of the agreement is three years with three subsequent 12 month options to renew.

David Jones CEO and managing director Paul Zahra said that the agreement with Dick Smith is aimed nullifying the risks associated with the category and enable the company to leverage the sales and profit benefits from the collaboration.

"As part of our Future Strategic Direction Plan we stated that we would review all of our underperforming categories, Electronics was one such category," added Zahra.

"Our agreement will also enable us to drive increased foot traffic into our stores and onto our webstore as we leverage the 6 million catalogues issued by Dick Smith each week."

Dick Smith will also facilitate the orders placed on David Jones' webstore through a 'Drop Ship' model, while the branding will be in line with David Jones's branding principles with the retailer owning customer database.

Dick Smith CEO Nick Abboud said, "The ability to combine the David Jones Electronics business with our existing Dick Smith business will create critical mass which will strengthen our buying power, allowing for more competitive prices for customers."