JB Hi-Fi to Purchase Victorian Kitchen and Laundry Specialty Store

August 12, 2024 TruthUSA

The electronics consumer retailer posted a net profit of $438.8 million in the last fiscal year, down 16.4 percent.

JB Hi-Fi is moving to acquire kitchen and laundry specialist E&S Trading to expand its product offerings after seeing a decline in net profit and sales in the last fiscal year.

Under the acquisition agreement, JB Hi-Fi will initially purchase 75 percent of E&S for $47.8 million and will buy the remaining 25 percent in September 2029. The acquisition will be funded with existing cash reserves.

“JB Hi-Fi’s deep understanding of the homemaker sector and extensive experience in the appliance industry make it an ideal partner for our business,” said Rob Sinclair, E&S managing director.

“It will be business as usual at all existing stores. Our customers can expect the same excellence they have come to know and trust. I will remain managing director, continuing to employ our successful growth strategy on a broader scale.”

E&S’ product categories include kitchen and cooking, bathroom, laundry and cleaning, alfresco, and heating and cooling. Currently, it has 10 showrooms in Victoria and a showroom in ACT slated to open this month.

JB Hi-Fi said that it expects to continue to grow E&S in Victoria and nationwide.

“E&S has a highly complementary premium product offering, which will appeal to a new customer base, and a commercial construction market focus, making it a strategically compelling addition to the JB Hi-Fi Group,” said Terry Smart, JB Hi-Fi’s CEO (pdf).

JB Hi-Fi’s Net Profit Declines

The acquisition announcement comes as JB Hi-Fi reported its net profit fell 16.4 percent to $438.8 million in the 12 months to June 30, 2024, from $524.6 million in the prior fiscal year.

The company’s total group sales declined 0.4 percent to $9.59 billion from $9.63 billion.

In Australia, its sales grew 1 percent to $6.61 billion, thanks to continued demand for technology and consumer electronics products, accompanied by well-executed Black Friday, Boxing Day, and Tax Time promotional periods.

Moreover, sales climbed 12.3 percent to NZ$327.9 million in New Zealand, with the growth attributed to investment in new stores and initiatives.

However, whitegoods specialist The Good Guys’ sales slid 4.8 percent to $2.68 billion.

Meanwhile, for the period of July 1 to July 31, 2024, JB Hi-Fi Australia’s sales grew 5.6 percent with comparable sales growth of 5.2 percent.

JB Hi-Fi New Zealand’s sales for the month rose 12.2 percent while its comparable sales dropped 4.9 percent.

The Good Guys recorded sales growth and comparable sales growth of 2.7 percent.

“It is pleasing to see sales momentum in Australia continue into July. We remain committed to offering the best value and exceptional customer service to maximise our brands sales opportunities,” said CEO Smart.

“We will remain focused on our customer’s needs and continue to innovate as we navigate another uncertain year.”

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