Nick Abboud was richly rewarded at the helm of electronics retailer — but the good times weren’t to last.
It's been a dramatic rise and fall for Nick Abboud, the former Dick Smith boss who entered the ranks of Australia's richest executives after the firm's sharemarket float.
The retail veteran, who resigned on Monday following the chain's collapse into receivership last week, took the helm in 2012 after he and private equity firm Anchorage Capital purchased the transtasman electronics seller from Woolworths for around A$100 million ($106 million).
Abboud was richly rewarded for the "significant transformation" Anchorage said he spearheaded at Dick Smith in the lead-up to the company's December 2013 sharemarket listing, which valued the business at A$520 million.
According to the prospectus, his shareholding rose significantly after the float to give him a 6.5 per cent stake in the ASX-listed firm.
The stake was worth A$34 million when Dick Smith shares peaked in January 2014, propelling the then 43-year-old into Australia's BRW Rich Bosses list.
Abboud, who spent 19 years with department store operator Myer before becoming Anchorage's man at Dick Smith, also received a A$6 million cash payment as part of the listing, the prospectus said.
He earned a A$2.6 million salary package in 2014, which fell to A$1.4 million last year.
By the time Dick Smith shares entered a trading halt on January 4, the stock had slumped 84 per cent below its A$2.20 initial public offering price, valuing Abboud's shareholding at A$5.4 million.
ASX records indicate he did not reduce his stake between the listing and the firm's collapse, the
Sydney Morning Herald
reported.
Australian senator Nick Xenophon has called on Abboud to front up to investors in Dick Smith who have been financially impacted by the collapse. Photo / Michael Craig
It was a different story with Anchorage, which sold the last of its shares in September 2014 and walked away with an enormous gain on the Dick Smith investment.
Abboud, who could not be reached for comment, will not receive an exit package and, according to Australian media reports, is "personally shattered" by Dick Smith's demise.
Australian senator Nick Xenophon has called on Abboud to front up to mum and dad investors in Dick Smith who have been financially impacted by the collapse.
Don Grover, whose former roles include a stint as chief executive of Fusion Retail Brands and Dymocks, has been appointed as Dick Smith's interim CEO.
Morningstar analyst Daniel Mueller said he wasn't surprised Abboud had resigned.
"Given it's now in the hands of receivers, the time for a change in management is now," Mueller said.
Receivers Ferrier Hodgson said Grover would assist with the operation of the firm while a restructuring is carried out and potential buyers for the business, which continues to trade, are sought.
The company owes roughly A$140 million to secured creditors, including HSBC and National Australia Bank, and around A$250 million to unsecured creditors, including suppliers and holders of gift vouchers that will not be honoured.
The receivership came after the firm abandoned its profit forecast last month amid a sales slump that left it with high levels of excess stock, which had to be heavily discounted before Christmas.
Ferrier Hodgson said this week it had received more than 40 expressions of interest in the retailer from possible buyers.
There has been speculation that the New Zealand arm of Dick Smith, which operates 62 stores, could be sold as a separate entity and had already received interest from potential suitors.
