EXCLUSIVE: A major new JB Hi Fi online appliance group could emerge out of the restructure of the struggling Clive Anthony retail operation, which is currently under review by JB Hi Fi management.Terry Smart, the CEO of JB Hi Fi told ChannelNews that the restructure of the Clive Anthony operation could result in some Clive Anthony stores being rebranded JB Hi Fi while others could be “closed”. He also said that the company is looking at “store within a store” concepts for some locations with a JB Hi Fi store co-locating with a Clive Anthony store.
While Smart would not go on record about a JB Hi Fi online appliance group, he did admit it was an option that the group was looking at.
Craig Woolford an Analyst at Citigroup said that a JB Hi Fi online appliance operation “made a lot of sense” and was an easy way to manage appliance sales. However he was cautious as to what the reaction of vendors would be to such an operation.
Currently NSW Company, Winnings is delivering appliances online via their Appliances Online site. Also planning an online appliance operation is the Betta Electrical Stores.
Yesterday JB Hi Fi shares climbed 7% after the consumer electronics and IT company announced a buyback of much as 10 per cent of its shares.
They also cut their full-year profit guidance due to costs associated with the restructuring of their Clive Anthony operation.
According to Smart, the Clive Anthony operation has been a drag on the company’s overall performance.
He said that a restructuring of the group was essential “moving forward”.
When asked about online for Clive Anthony he said “There is a great deal of competition in the online space, however it does present us with an opportunity to sell appliances online especially as 70% of purchases for appliances are made when people have a problem and want an immediate replacement”.
Smart said that the company intended to buy back up to 10 per cent, or $170 million, of its shares through an off market buy-back. The cost of the buy-back would be $700,00 and had been initiated because of ongoing strong cash flow from their JB Hi Fi store operations.
”We continue to take a prudent approach to the management of our balance sheet and we are now in a position to return capital whilst still maintaining financial flexibility to invest in growth opportunities,” Smart said.
The company said net profit for the 12 months to June was now likely to be $108.5 million to $113.5 million, compared with the previous forecast of between $134 million and $139 million.