By James Wells
MELBOURNE: JB Hi-Fi CEO Richard Uechtritz has announced plans to open up to 15 stores in New Zealand and grow the business to 100 shopfronts in Australasia despite widespread concerns about the long term health of the country’s economy.
According to an article published in the Australian Financial Review, Uechtritz said the New Zealand expansion would be slow and steady with the first of four stores in Auckland to open by this time next year.
According to the article, the company is looking to open up to 15 stores in both stand alone locations as well as high traffic shopping centres.
JB Hi-Fi will have 73 stores in Australia by the end of June 2007 and Uechtritz expects the group to eventually operate 100 stores.
Uechtritz has admitted that there is a risk in expanding into the New Zealand market, but he believes the low cost model and its home entertainment offerings will endure the trying economic conditions it also faces in its domestic market.
Uechtritz believes products such as large screen televisions will become more popular after price erosion and suit a volume retailing offering. The number of Australian households that own a large screen television has increased from 234,000 or three per cent of households in 2004 to 702,000 or nine per cent of households in 2005. Uechtritz expects up to 2.57 million homes or 30 per cent of Australia’s 7.8 million households could own a large screen television over the next few years.
Last month the audio visual retailer, who sells CDs, DVDs, home theatre systems, flat panel televisions as well as gaming consoles and software, announced it will be expanding into the $1.5 billion personal computer market dominated by Harvey Norman.
After announcing a move into information technology, the JB Hi-Fi share price soared to $5.55 two weeks ago, but dropped as low as $4.51 yesterday after announcing the move across the Tasman. Its share price last week was 40 per cent higher than November 2005.
Uechtritz declined to comment further on the move to current.com.au,