The company blamed its financial woes on worse-than-expected sales and cash generation in December, continuing the weak trend from previous months.
“Whilst confident on the long-term viability of the company, the directors have been unsuccessful in obtaining the necessary support of its banking syndicate to see it through this period,” chairman Rob Murray said in a statement on Tuesday.
The company explored alternative funding, but concluded this would not be secured in time to order the required inventory during the next four to six weeks, he said.
The announcement comes a day after Dick Smith shares were put in a trading halt, a move that revived investor fears about the company whose share price has tumbled 84 per cent since last May.
The shares have now been suspended from trading.
The retailer first warned in October that full year profit could fall as much as 15 per cent to between $37 million and $43 million, as it stepped up discounting and advertising to restore sales growth.
However, the sales slump continued into November, resulting in the company having to dump its profit forecast a few weeks later.
The retailer was forced to launch a firesale in early December to clear unwanted stock that cost it about $60 million in writedowns.
Shares in the company have been battered in recent months, wiping out hundreds of millions in market value.
Dick Smith shares closed at 35.5 cents on the last trading day in 2015.
Retail giant Woolworths received $94 million after selling Dick Smith Holdings to private equity firm Anchorage Capital Partners in 2012.
A year later, Anchorage floated the company on the Australian share market at $2.20 a share, valuing it at $520 million.
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