JB Hi-Fi has expanded its remit over the past year, transforming from a tech-only retailer into an appliance destination with a full electrical offering. Since December 2012, the brand’s appliance store concept JB Hi-Fi Home has expanded from a “trial” into a complete business strategy, with the retailer promising a total of 16 stores open by Christmas.
Addressing shareholders at the company’s 2013 Annual General Meeting today, CEO Terry Smart spoke about the strength of the JB Hi-Fi brand, saying it allowed the company to experiment with the new format, without damaging the existing JB offering.
“In December 2012 we commenced a trial of our ‘Home’ store concept with a total of 8 stores converted by the end of FY13,” said Smart. “Sales results during the trial period were positive, with strong customer engagement with the new categories and no negative impact on existing JB Hi-Fi business.
“The trial ‘Home’ stores demonstrated how JB Hi-Fi can integrate the home appliance categories within its existing model while maintaining the unique JB Hi-Fi brand personality.”
Smart also offered further insight into the company’s expansion plans, both for the traditional JB Hi-Fi stores and the Home sub-brand.
“We anticipate converting 10 additional existing stores in FY14 and see the potential for approximately 50 Home stores over the next three years,” he said. By Christmas this year we expect to have opened six new stores since 1 July 2013, with one store being in the new Home format. A further seven existing stores are also expected to have been converted to our new Home store format by Christmas, bringing the total number of Home stores to 16.
“The company maintains its stated target of 214 JB Hi-Fi stores and is on track to open its previously stated guidance of 12 new JB Hi-Fi branded stores and 10 Home conversions during FY14.
“The long term store number 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.”
While Smart recognised tough conditions in the current retail climate, he was positive about growth across the JB business, including the strong home appliance market.
“We are excited about the sales growth opportunity that the circa $4.6 billion home appliance market presents,” he said.
“Whilst we still have the critical Christmas trading period ahead of us, we are pleased with our first quarter sales result with total growth of 8.1 per cent and comparable sales growth of 2.9 per cent.
“As always we expect the market to remain competitive as retailers drive for market share in the lead up to Christmas, however we remain confident of our ability to execute and maximise this important trading period.”