Collapse of Aussie retail giant puts private equity sales in spotlight

Sydney

THE collapse of Australia's biggest electronics retailer on Tuesday, just two years after listing, has sparked a fresh round of criticism about the swift and often mysterious methods that private equity firms use to prime their investments for sale.

The demise of Dick Smith Electronics Ltd is part of a broader pattern: buyout firms cutting the time they spend turning their investments around and leaving the newly public companies poorly placed to weather turbulence.

Australia's biggest department store chain, Myer Holdings Ltd, cleaner-caterer Spotless Group Holdings Ltd and top-rating television broadcaster Nine Entertainment Co Holdings Ltd have all seen their shares slump below their issue price following quick private equi…