Dick Smith to Close Stores in Australia and New Zealand

February 1, 2012 6:27 PM EST

Electronics retailer Dick Smith could wind up significantly cutting underperforming sites among 66 New Zealand stores in Australia and New Zealand, according to an analyst.

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Dick Smith's parent company, Woolworths, said on Wednesday that it would close about 100 of its 386 stores before putting the chain up for sale.

Market commentator Arthur Lim said this move could mean Dick Smith's stores were very likely to be queued for reassessment and eventual shutdowns.

"I would be very surprised if they don't take a very sharp knife [to it]," Lim said, adding the retail business is more challenging in New Zealand than in Australia.

Meanwhile, Woolworths said Wednesday it would consider unsolicited offers for Dick Smith, as proposals were raised after the company announced a strategic review in November.

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The parent company also said it would take a hit of A$300m (NZ$387m) from the restructuring, which it expected to complete within two years.

Lim also said it was more likely existing players such as Harvey Norman would buy Dick Smith to add the name to its network, TVNZ reported.

A report by Australian broker CLSA released in December forecasted the shutdown of half of Dick Smith stores, considering the chain made A$3.9m per store, compared to JB Hi-Fi's A$18.8m.

Meanwhile, Noel Leeming chief executive John Journee said the company's increase in market share to "probably north of 25%" from "the high teens" a few years ago could have worked against Dick Smith and Harvey Norman, which had both reported negative growth in recent years.

Dick Smith New Zealand's profits fell 50% to NZ$3.6m in the year ended June, on revenues of $321.8m, according to Companies Office records. Figures in the year ended 2010 were lackluster, with a 49% profit plunge to $7m.

Journee estimated Dick Smith's market share to be "in the low teens," TVNZ reported.

This article is copyrighted by IBTimes.com.au, the business news leader