The demise of electronics company Dick Smith will see a carve-up of its market share, with The Warehouse likely best placed to fill the electronics market void.
Dick Smith was placed in receivership in January, laden with almost $420million of debt to banks and unsecured creditors, but its receivers failed to sell any parts of the company.
A total of 363 outlets in Australia and New Zealand and 2890 staff, including 62 New Zealand shops and 430 staff, were told on Thursday its doors would be closing in about eight weeks.
In a Forsyth Barr research note, the brokerage said Noel Leeming, which is owned by The Warehouse, is the country's electronics market leader, with its 78 outlets.
"The Warehouse is well positioned to benefit from the closure of Dick Smith's 62 New Zealand stores,'' the Forsyth Barr research note said.
Noel Leeming's full-year 2015 sales were expected to be $665.6million, with gross profit at $141.8million, JB HiFi sales of $211.1million with $38.3million profit and Dick Smith sales at $179.2million, and profit at $42million.
Noel Leeming's market share was estimated at about 30% of the market, and Dick Smith was about 8%.
While The Warehouse was in a good position to capitalise on the Dick Smith closures, the research noted it had to compete with online businesses like Mighty Ape, eBay and Trade Me, and other competitors such as JB HiFi and Harvey Norman.
The Red Sheds division of The Warehouse is its key earnings contributor, with 62% of all sales and 81% of ebit, but Noel Leeming accounted for 24% of sales and 13% of ebit.
"The Warehouse reports on March 11 and we will look for detail on company expectations and strategy following the Dick Smith closures.''
