JB Hi-Fi has set an ambitious goal for its JB Hi-Fi Home store concept, announcing that there is the potential to grow the number of stores in Australia to 50 within the next three years. After an initial trial period, JB Hi-Fi had 8 Home stores in its network at the end of the 2013 financial year, and there are plans to add a further 10 in the 2014 financial year.
The publicly-listed retailer used its 2013 Annual Report to discuss the performance of its retail sub-brand, saying that the initial trial rollout of JB Hi-Fi Home stores has been well received and adding that JB is “excited” about the value to be found in appliance categories.
“In December 2012 we commenced a trial of our ‘Home’ store concept with the initial conversion of four existing stores to JB Hi-Fi Home, followed by a further four conversions by the end of FY13,” JB chairman Greg Richards wrote in the annual report. “Sales results during the trial period were positive, with strong customer engagement and no negative impact on existing JB Hi-Fi categories.
“The trial stores demonstrated how JB Hi-Fi can integrate the home appliance categories within its existing model while maintaining the unique JB Hi-Fi personality. We anticipate converting 10 additional existing stores in FY14 and see the potential for a total of approximately 50 Home stores over the next three years. The long term opportunity is still to be fully quantified, as this will be dependent on space available in existing stores and the suitability of new store locations.
“We are excited about the opportunity that the circa $4.6 billion home appliance market presents,” Richards added. “JB Hi-Fi sees the introduction of these new product categories as a logical extension to its current entertainment categories, predominately at the company’s larger homemaker centre sites.”
Accounting for its share of the $4.6 billion pie, the company confirmed that JB Hi-Fi Home’s results to date “suggest annualised incremental sales per store of circa $3.0 million in its first year, increasing to circa $5.0 million in its second year”.