Anchorage Capital may have reignited Dick Smith's lost spark, but is the IPO the real deal? The Dick Smith chain was founded by Richard "Dick" Smith in 1968, when the entrepreneur was in his mid 20s. SNAPPED up by private equity just 15 months ago, Dick Smith will be floated next month. But the remarkable turnaround story has its sceptics, writes Jane Harper. IT HAS been the ultimate jump-start for an electronics business that had lost its spark. Dick Smith's owners believe that in just 15 short months, the chain has been transformed from the damp squib nobody would buy, into a dynamic opportunity capable of clawing in $345 million in a float. As the retailer prepares to launch on the public market next month, tyre-kickers and serious shareholders alike will be running the rule over its prospectus. Since Sydney-based Anchorage Capital Partners snapped up the languishing business for a song from Woolworths last September, there has been a steady march of new store plans, ramped up marketing campaigns and other growth initiatives. But has the whirlwind turnaround been a genuine overhaul, or merely a skin-deep makeover? Dick Smith's management team argues it has completely rewired the company to create a "transformed business model that is well positioned for future growth." Chairman Phil Cave pointed to a string of "strategic, customer, operational and cultural initiatives" that he said had already delivered benefits, with more to follow in coming years. Woolworths bought the chain in the early 1980s but kept the image of its founder in the branding. Under the sheltered wing of private equity ownership, Dick Smith chief Nick Abboud has unveiled ambitious expansion plans to increase the store network from 359 to 400 within three years. The group says it has improved its online offer, while also branching out into new bricks and mortar ventures. These include a deal to manage the electronics sales for high-end department store chain David Jones, with Dick Smith's brand rolled out in store. Dick Smith is also introducing Move stores that focus on specialist mobile and wireless products. "Dick Smith has a clearly defined strategy to seek to deliver sustained revenue and earnings growth," the company says in its prospectus, released on Thursday. It has also forecast a surge in net profit from $6.7 million for the year to last June, to $40 million this financial year. The confidence around the business is a far cry from the uncertainty and apathy it attracted just last year, when retail giant Woolworths seemed to be struggling even to give it away. Woolworths gave the Dick Smith brand an overhaul in 2009 in an attempt to bolster sales. Woolworths announced in January 2012 that it would offload the Dick Smith business, saying the chain was strong and profitable but no longer suited the group's portfolio. While Woolworths chief Grant O'Brien said at the time that the business had already attracted a number of unsolicited offers, the bidding process quickly went quiet. In July and then again in August last year, Mr O'Brien said the sales process was nearing an end. But it was not until September - a full nine months after the sale was flagged - that Anchorage and Woolworths finally shook hands on the deal. And when the cash was stumped up, it was more pocket change than windfall for Woolworths. Anchorage picked up the Dick Smith business, which Woolworths at one time valued at as much as $400 million, for a trifling $20 million. In a bitter irony, it was about the same amount entrepreneur Dick Smith received selling the business to Woolworths in 1982. Dick Smith chief Nick Abboud was appointed by the group's private equity owner Anchorage Capital Partners, which bought the chain from Woolworths in September, 2012. Anchorage earlier this year gave Woolworths a further one-off payment of $74 million, which in turn saw Woolworths agree to give up its rights to a portion of the float proceeds. Anchorage on Thursday announced through Dick Smith's prospectus that it would sell a 65 per cent stake of the business on the Australian Securities Exchange for $2.20 a share. The retail offer will open on November 22, with the stock to start trading on December 12. But Invast chief market analyst Peter Esho warns potential shareholders to tread carefully before plunging into electronics retailing - a category that is not only notoriously tough, but will require ongoing investment from the business to stay relevant and ahead of online competitors. "Woolworths made the decision to sell and move on," he says. If the largest retailer in Australia cannot make money from a concept, I think others will also struggle. Retailing is very difficult but there can be opportunities to turnaround interesting businesses. I don't doubt this, but we just don't have confidence in Dick Smith as a concept.