Store openings in the pipeline.
The acquisition of The Good Guys by JB Hi-Fi, expected to complete in late 2016 or early 2017, will increase JB Hi-Fi’s footprint to a total combined 295 stores in Australia and New Zealand and enhance its growth platform through the opportunity to open new The Good Guys stores in currently underrepresented catchment areas.
There is potential for four to five The Good Guys store openings per year over the next three years, in addition to the continuation of the JB Hi-Fi store roll-out.
JB Hi-Fi CEO, Richard Murray said, “The Good Guys is a high quality Australian retailer with an excellent track record. We are very impressed by what the owners and management have achieved with the business since its establishment and the leading market position they have created.
“The acquisition is an attractive strategic opportunity for JB Hi-Fi since The Good Guys is a highly complementary business which is aligned with our management philosophy and significantly enhances our offering in the $4.6 billion home appliances market.”
“We are pleased to welcome Michael and his executive team and look forward to working together to create a market leading consumer electronics and home appliance retail group,” Murray added.
JB Hi-Fi management estimates that the acquisition will deliver net synergies of $15-20 million per annum to the combined business after a three year integration period, excluding one-off implementation costs. These synergies are expected to be generated from a combination of buying synergies, logistics and supply chain efficiencies, procurement synergies and support function efficiencies.
The acquisition adds scale to JB Hi-Fi’s existing online customer proposition and The Good Guys strength in home appliances adds depth to the JB Hi-Fi Solutions commercial offering. Combined Group online sales of $231 million to customers in FY16 will be approximately 4% of total combined group FY16 sales.
The Good Guys recently launched a commercial business and JB Hi-Fi Solutions has a centralised commercial sales capability servicing B2B, government, education and insurance customers. The combination of the commercial businesses is expected to drive continued growth as clients are offered a broader product range, scale and enhanced capability.