By Patrick Avenell
SYDNEY, NSW: Panel price wars and looming competition in the whitegoods space are reasons why the Muir Family are looking to sell The Good Guys franchisor network, according to a leading analyst.
With the exact nature of the sell off — public float or private transaction — still unclear, Macquarie Securities Group analyst Rob Blythe has isolated a number of key factors.
“We can identify reasons why The Good Guys may be for sale,” Blythe said. “[It has] a mix that is overly reliant on flat panel sales, [there’s] a pending brand-lead price war looming in whitegoods (similar to the flat panel pricing battle for market share over the past two years), and a new market entrant in Woolworth’s Lowes that will increase competition in whitegoods and cooking appliances.”
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This explanation also bodes poorly for rival retailer Harvey Norman.
“We expect that this would be of most concern to Harvey Norman as they have the greatest exposure to competition to the whitegoods and cooking category.
“We estimate that around 18 per cent of Harvey Norman’s Australian sales could be impacted by increased competition in this space.”
Meanwhile, Current.com.au has been told that the Muir Family are currently making enquiries into purchasing Good Guys franchised stores back from the franchisees. This would be beneficial to proposed buyers who did not want to have to deal with numerous franchisees upon taking control of the business.
Do you have and information about The Good Guys looking to sell? Contact us in confidence.