JB Hi-Fi backs government, crisis economy presenting opportunities

By Patrick Avenell

JB Hi-Fi has today backed the Rudd Government’s plans to stabilize and motivate the Australian economy. In a presentation to the UBS Australian Emerging Companies Conference, CEO Richard Uechtritz said that the plans announced so far would be beneficial to the retail group, and the industry in general.

In the presentation, JB Hi-Fi chief conveyed optimism reminiscent of Kennedy’s 1961 declaration of a future moonwalk, once again noting that the attractiveness of fast moving stock and a low-overheads business model were the two major factors in JB’s continued positivism amid an environment of uncertainty.

“The $10.4 billion government package is positive for retail and timely for JB (eg families receive lump sum payment early December) as we are very much a Christmas gift destination retailer for small value items such as CDs, DVDs, games, iPods, cameras, navigation, etc.,” said Uechtritz in the presentation.

Furthermore, Uechtritz noted that the fear and uncertainty, and the steadily escalating panic, is obfuscating key drivers that can actually be beneficial in the consumer electronics retail space.

“Some positive sentiment drivers appearing – lower interest rates, government support package, government bank guarantees and lower oil prices are helping to balance the negative sentiment from the financial crisis,” he said.

“[The] weak $A is good for consumer electronic retailers as it will stop or slow price deflation,” said Uechtritz, before revealing the most salient driving factor in JB’s optimism: “JB does not import any products”.

In the speech referred to above, Kennedy predicted in 1961 that America could send a man to the moon, and bring him home safely, before the end of the decade. Whilst Kennedy did not live to see his bold vision become reality, should JB continue to achieve its goals, shareholders may begin to hold Uechtritz in similar esteem.

For news on JB Hi-Fi’s youth strategy and expansion plans, click here.

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