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Dick Smith Holds Massive Sale Amidst CE Price Erosion

By Tony Ibrahim | Friday | 25/05/2012

In what appears to be the start of a major price war, Dick Smith has rolled out massive discounts across multiple products in the CE and IT space.

On Saturday the 26th of May, Dick Smith stores are holding "a special XXXL sale", discounting CE and IT products by up to 50%. Laptops will be discounted by up to 30%; headphones, and computer keyboards, mice and webcams by 40%; and GPS units by 30%.

Click to enlarge
Even Apple computers are 15% off, despite rival companies discounting them by no more than 10%.

The aggressive discounts come at a time when the electronics industry is trying to uphold product prices in a bid to remain profitable. The rampant discounting of new electronics products has seen margins slip, affecting the bottom line of companies the likes of Harvey Norman.

The move to discount comes as Woolworths struggles to find a buyer for the Dick Smith chain. The Woolworths group announced Dick Smith's sale in January, but analysts struggled to "identify any logical buyers for Dick Smith.

They will also be closing up to 100 of its 386 Australia and New Zealand DSE stores. At present, it isn't know which stores will be closed down but the process will be "done over two years," with Woolworths allocating $300 million for company restructuring.

The last major sale Dick Smith had was coined a 'scam' by customers who were promised $7 million dollars of discounted gaming consoles and games, only to be greeted by empty shelves as employees grabbed the hottest items.

A consumer backlash ensued, with memes mocking the sale online within hours and even a YouTube parody. To appease customers, the company's General Manager issued an apology and repeated a similar sale the following week.

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