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JB Hi-Fi makes home appliances foray

Nicholas Grove  |  28 Nov 2012Text size  Decrease  Increase  |  

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Nicholas Grove is a Morningstar journalist.

 

JB Hi-Fi Limited (JBH) on Wednesday launched its JB Hi-Fi "HOME" concept stores, which will offer a full range of whitegoods, cooking appliances and small appliances.

These stores, which will also offer home entertainment goods, will initially be located at existing larger homemaker centres where the "HOME" concept will be a logical extension of the company's current entertainment categories, JB Hi-Fi said.

Chief executive Terry Smart said the strength of the JB Hi-Fi 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 the eight years of operating the Clive Anthonys stores," he said.

"We will always be very protective of the JB Hi-Fi brand and what it means to our customers. As such, we will ensure that the 'HOME' stores will continue to carry a full range of JB Hi-Fi's existing categories, but with the addition of home appliances."

While confident of the success that can be achieved with these new concept stores, Smart said the company will initially conduct a low-risk and measured trial in Queensland with the initial conversion of four homemaker centre stores. Two more stores will follow in the new year.

The company also flagged it will soon launch a new dedicated e-commerce site that will allow customers to both research and buy online.

"Recently, we have seen a lot of consolidation taking place within the home appliances category as companies with less efficient and higher cost bases struggle to remain relevant and competitive," Smart said.

"Our low cost of doing business enables us to deliver low prices and, with our strong focus on customer service, JB Hi-Fi is well-positioned to take advantage of this opportunity and be successful in the home appliance market."

City Index chief market analyst Peter Esho described the move by JB Hi-Fi as "very sensible".

"If successful, there will be a case to roll out further and take the fight to Harvey Norman (HVN), the Good Guys, Bing Lee and K-Mart, which are all key players in the white goods, cooking and small appliances segment," he said.

"JB Hi-Fi has the experience and ability to run a low-cost business model - something that is needed to make money in low-margin white goods and small appliances."