JB Hi-Fi CEO Terry Smart has said that his new Pitt Street store in Sydney which only sells hardware is “not a new direction” for the Company, but he does admit that the store is suffering from a “poor” location. He describes it as an “experiment” store.”It is critical that we keep building the JB Hi Fi brand as a discount value for money brand. This is our heritage. We have to stay focused on what has made us successful. We recognise that there are tough times ahead but if we stick to our core value we will get through this”. Smart Said.
Speaking after he reported a 13.3% lift in profits and an 8.3% increase in revenue for the year ending June 2011 Smart said.
“We have to concentrate on offering low prices while managing our business overhead so that we can offer low prices. This allows us to remain competitive regardless of what is happening out there”.
When it was put to Smart that the JB Hi Fi experiment of selling hardware only in their new Pitt Street store in Sydney was struggling Smart said “We are big enough now that we can experiment. We are also big enough that we can trial new concepts without it impacting on our overall business”.
“That store will develop over time, we made sure it was still seen as a JB Hi Fi store with such things as hand written tickets despite the fact that we are only selling hardware. It is performing well but we do have a problem with the location which we are addressing” he said.
Smart also said that online which grew 56% last year and is now attracting 800,000 unique visitors a week had become a critical part of their operation.
“It’s not just about what we sell online, because we have a good online operation consumers are engaging with us. A visit to the online store often results in a visit to a store near to where they live” Smart said.
“We believe that online now accounts for between 10 and 12% of our business because it is delivering consumers to stores. We are giving them the choice of where to shop he said”.
Smart said that online sales grew 51.6% over the full year and were up 68.1% in the second half.
Shortly JB Hi Fi will introduce a new gift card online module which will enable our customers to activate and manage their JB Hi-Fi Gift Cards online. “Buyers will be able order online and pick-up in store.”
He added “We are pleased with our results in what was a challenging period for retail. It is a testament to the strength of our brand, our systems and processes and the quality of our people in driving this result” .
The directors have declared a fully franked final dividend for the year of 29.0 cents per share. Total dividends for FY11 of 77.0 cents per share represent a payout ratio of 60% of normalised1 FY11 NPAT. The final dividend is to be paid on 2 September 2011. The record date for determining the entitlement is 23 August 2011.
During the year the Group successfully completed a $173.3 million off-market share buy-back which resulted in the purchase of 10.8 million shares, representing 9.9% of shares on issue.