By Claire Reilly
The chief executive of JB Hi-Fi, Terry Smart, is banking on a range of new products to help drive sales over the Christmas period after enduring “one of the most demanding periods for retail” over the past year.
Speaking to shareholders at the company’s AGM, Smart said that the 2012 financial year brought “challenges on both micro and macro levels” for JB, despite the fact that the company brought in “record sales” of $3.1 billion.
“Gross margin was impacted by a combination of the challenging trading environment, more aggressive and sustained levels of discounting in the market and increased shrinkage levels,” said Smart. “Store closures by competitors such as WOW Sight & Sound, Dick Smith and Game also impacted margins as they cleared stock at low prices.”
The company saw stock loss (or “shrinkage”) levels rise during the financial year. However, Smart said that JB’s levels were low (0.3 per cent of sales) compared to the industry average (quoted as 1.07 per cent).
In the year to 30 June 2012, JB Hi-Fi opened 15 new stores, while 1 JB-branded store and 3 Clive Anthonys stores were closed. The company expects to have opened 11 new stores by Christmas (measured since 1 July), though “three sub-scale JB Hi-Fi stores have been closed over the past few months” as they reached the end of their leases.
And as Christmas nears, Smart also noted the products that he expects to drive sales in the busy period, thanks to recent hype and launches.
“We have seen the very successful launch of the Apple iPhone 5 and the latest Microsoft operating platform Windows 8,” he said. “We will also soon seen the release of Apple’s iPad mini and Nintend’s anticipated Wii U. The company sees these as important drivers of sales growth as we head into the Christmas period.”