JB Hi-Fi ... moving into whitegoods. Photo: Glenn Hunt
The carnage in the retail sector has created an opportunity for JB Hi-Fi, which said it plans to bring its low-cost business model to the homewares market and offer whitegoods, cooking and small appliances.
JB Hi-Fi chief executive Terry Smart said the company was attracted to the area after seeing the consolidation in the home appliances category ‘‘as companies with less efficient and higher cost bases struggle to remain relevant and competitive’’.
He said the company’s low-cost business model means it is ‘‘well-positioned to take advantage of this opportunity’’.
The strategy will pitch JB Hi-Fi more directly against Gerry Harvey’s retail operation, Harvey Norman, which has backed itself to remain the last man standing as rivals go out of business.
Mr Harvey has said conditions remain tough and predicted more players will go bust in the new year
The market has reacted negatively to the announcement, with JB Hi-Fi shares falling 6.4 per cent - 68 cents - to $10.01.
The new "Home" concept stores, will initially be located at JB Hi-Fi's larger homemaker sites where it sees the new category as a logical extension to its current entertainment categories.
Harvey Norman has re-aligned its business to try and focus more on its homeware categories due to the massive price deflation across electronic goods like televisions and computers.
JB Hi-Fi, which is focused heavily on electronics, has also suffered but still retains the favour of brokers due to the efficiency of its business model and plans for store expansion.
Mr Smart said the company still had a "significant amount of growth ahead of us as we continue our store rollout program". He said the company believed the strength of its brand can be further leveraged to capture some of the $4 billion home appliances market.
"Today we have existing supplier relationships, buyers, merchandising capability and most importantly passionate and skilled appliance sales staff, all gained through eight years of operating the Clive Anthony stores," Mr Smart said.
The company said it will start with a "low-risk and measured" trial in Queensland with the initial conversion of four homemaker centre stores with minimal capital expenditure required. A successful trial will see the concept implemented at other sites around the country.