The consumer electronics division of Woolworths, which includes the Dick Smith and Powerhouse brands, had a 16 percent fall in second-half earnings to $27.3 million. Sales increased 11% with margins being blamed for the downturn. The Company has also been accused of dumping prices to get CE sales.
Woolworths who are currently undertaking a review of their consumer technology division said that the “modest results” were attributable to the competitive nature of the CE market. They also admitted that they have taken significant “price hits” which had resulted in the markdowns of products and a reassessment of which brands their CE stores will carry.
Woolworth’s executives also said that that several poor performing and irrelevant CE brands had now been “deleted” from their stores.
Last week Acer distributor Bluechip InfoTech accused Coles Myer subsidiary Harris Technology of dumping stock to below their purchase price from the Acer distributor.
Bluechip said that the $799 retail price that Harris Technology placed on the Acer 2TB EasyStore system was below cost “Harris is dumping their stock well below RRP when selling at $799” Kieren Kemm Product Manager at BluChip said in an email to ChannelNews.
Acer who last week rolled out a 3TB EasyStore device at a recommended price of over $1,300 has refused to return calls to ChannelNews.
Overall Australia’s biggest retailer, increased second-half profit 23 percent after adding more profitable groceries and cutting prices to win market share from second-ranked Wesfarmers Ltd.
According to Bloomberg net income rose to $735.5 million ($635 million) in the six months ended June 29 from $598.4 million a year earlier. Second- half figures were calculated by subtracting first-half earnings from the $1.6 billion full-year profit the Sydney-based company reported today.
“We have continued to refine our brand proposition with significant investment in price, merchandise range and quality during the year,” Luscombe said in the earnings statement. “This investment continues to deliver gains in market share.”
On the question of whether Woolworths were looking at buying JB Hi Fi We’re not in discussions with JB Hi-Fi, Woolworths boss Michael Luscombe said earlier today “We have conversations with literally dozens of firms every year and they’re done on the basis of confidentiality and I’m not ever going to betray that confidentiality.” Mr Luscombe rejected a follow-up question on whether JB Hi-Fi would be an attractive acquisition as “hypothetical”.