Home Wars: Is JB Hi-Fi Making A Big Mistake?
December 3, 2012 11:13 AM EST
- JBH needs to boost flagging revenues
- Plans to trial home appliance expansion
- Not what analysts had in mind
- Scepticism reigns
By Greg Peel
Hands up who remembers Brashs? In the 1980s Brashs became the iconic, large chain, go-to music store during the vinyl-to-CD transition, as well as selling "browngood" stereos and so forth and (since 1862) musical instruments . By the 1990s, and boasting 105 stores, Brashs business started to get stale. Richard Branson moved into the space with a new, cool attitude. Smaller music stores offered the buyer a more personalised service. As music earnings growth faded, Brashs decided to expand its earnings base base with a shift into whitegoods. In 1995 Brashs went belly up owing $80 million.
JB Hi-Fi ((JBH)) had for several years been the darling of the consumer discretionary sector. Over the past decade JB transitioned from a basic browngood and CD retailer to a leading edge, youth attractive source of IT products ? devices and software ? and rode the technology revolution wave right through the GFC. JB confounded the market in posting consistent earnings growth and store roll-outs at a time when stalwart listed retailers were feeling the pinch of the consumer back-down.
Four years after the GFC, the consumer is yet to come back in earnest. In the meantime, it's JB's turn to go stale. The IT revolution has become mainstream, and attacks are coming from different fronts including that of more Apple stores. JB was where you first want to buy a smart phone before Apple opened locally. In response, JB has decided to expand its earnings base by moving into whitegoods and kitchen appliances.
Ask not for whom the bell tolls.
Unlike Brashs, nevertheless, JB is not making a costly commitment management may live to regret. The company had previously acquired Home Appliances chain Clive Anthony which was cheap but cheap for a very good reason. JB has not been able to turn that business around, possibly because the name has been retained and since further tainted by the Clive Peeters collapse. The company has already converted several into JB Hi-Fi stores but management's new plan is to take six of those remaining Clive Anthony stores and rebrand them as JB Hi-Fi HOME.
Most Popular Slideshows
- Still The World Champions: Team USA Overpowers Serbia, 129-92 To Win 2014 FIBA World Cup [PHOTOS]
- Pope Francis: World War III Has Started On Piecemeal
- After Win Over Maidana, Mayweather Says He Is Prepared To Negotiate A Fight With Pacquiao
- From Fat To Fit: Celebrities Who Were Overweight Before They Became The Beauties That They Are
Join the Conversation
- Samsung Attacks iPhone 6 Plus Through New Galaxy Note 4 Commercial: Apple Claims Imitating Galaxy Note Phablets
- Pregnant Kate Middleton May Call Off Malta Trip Due To Sickness: Royal Couple Will Move To Anmer Hall Residence
- HTC ‘Double Exposure’ Event On October 8 Could Unveil HTC Eye With 5.2-inch FHD Display
- Apple iOS 8 Can Trump Google Android 5.0 L Upon September 17 Release
- Ukraine Crisis: Poland Denies Supplying Weapons To Kiev
- Twitter Photo Of British Medical Muslima Student Holding Severed Head
- Google Nexus 8 Release Date Countdown Begins Oct 8: 8 Killer Specs and Features to Expect