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As JB Hi-Fi gets set to announce its latest set of financials on August 13, boss Terry Smart is bullish about the future, despite the doom and gloom flagged by retailers.
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“We’re still successful at selling at a low price with low costs” Smart told Channel News, although admits “margins are smaller than we’d like,” repeating the issue of margin squeeze cited by every retailer from Harvey Norman to Dick Smith.
However, the retail boss isn’t oblivious to the difficult selling environment, adding “no doubt challenges remain.”
As bricks and mortar stores hit hard times, he admits the growing threat of online rivals like eBay, noting the e-tailer is “just one of the threats” JB face, along with other e-commerce sites like Catch of the Day all looking for a slice of the electronics market.
And the number of online rivals continues to increase, he notes.
However, Smart brushes off any threat by Grays Online $1 million auction of ex-Retravision stock as a “fairly small amount” noting there’s been a lot of this type of activity of late with the likes of Dick Smith, Wow and other retailers that have gone bust, selling stock on the cheap.
The online auction of $1m of electronics goods from the bust NSW Retravision stores, kicked off on Friday last, with everything from LCD’s, cameras and PC equipment, selling at a starting price of $9.
“We have seen a lot of stock [from bust retailers]..its a sign of the times,” he says.
But JB HiFi’s online trading is not doing too badly either, with more than one million consumers now trawling its site each week for deals on laptops, TV’s and other electronics.
In April the retail announced online sales for the March quarter were “strong”, up 76% with ‘factory scoops’ and ‘direct imports’ among the bargain being flogged by JB’s website.
The retailer’s full year financial results are out next week and Smart was giving nothing away about what will be announced.
JB also announced sales growth of 8.8% for the first quarter of 2012, noting the three months showed incremental sales improvement with March hitting +5.2% (from -5.55% in Jan), meaning its April-June numbers could be far higher than the droll growth of late.
So, will there be more consolidation in the CE market going forward, as Retravision and Wow and any number of small retailers go under?
Certainly, says Smart.
“There is much consolidation going on in the bricks and mortar side, while one the other hand, online is growing and the number of competitors continues to grow.”
However, consolidation is “good for us as it helps us pick up marketshare,” he admits.
But “there’s still opportunity out there” and JB are still opening new bricks and mortar stores apace, says Smart.
“It makes sense to open in certain areas and we trade profitability.”
Just how profitably, we’ll see Monday week.
