Beefed-up JB Hi-Fi tipped to enter whiteware market
Best known for CDs and computers, JB Hi-Fi looks poised to enter the whiteware market in New Zealand after buying Australian home appliances retailer The Good Guys.
The Good Guys entered New Zealand in 2008 but pulled out in 2014, citing the returns for the small scale of its operation here.
‘‘Consumers just didn’t understand their brand,’’ local retail consultant Chris Wilkinson of First Retail Group said.
In Australia, however, The Good Guys was considered an innovative retailer and a good catch for JB Hi-Fi, which could now pit itself against the likes of furniture and electronic goods heavyweight Harvey Norman.
Wilkinson said The Good Guys had nevertheless succumbed to the fiercely competitive appliances and electronics market.
‘‘You really need that scale now to be on the radar with supplies and you need to have that mana in the market.’’
JB Hi-Fi, which is on a fast growth path in New Zealand, has paid A$870 million (NZ$896 million) for The Good Guys, increasing its footprint to 295 stores in Australia and New Zealand.
The purchase would give JB HiFI The Good Guy’s intellectual property and ‘‘runs on the board’’ in terms of market share and suppliers, Wilkinson said. It was not unlike the way the Warehouse had bought Noel Leemings, which gave it access to certain brands.
Although JB Hi-Fi has said The Good Guys will operate independently, over time Wilkinson expects to see the two companies sharing real estate.
‘‘That must certainly be on their horizon,’’ he said.
‘‘The sites they have probably don’t lend themselves to that but we’re seeing a lot more availability of big-box sites out there at the moment, a lot of rationalisation and shifting around.’’
Selling appliances at JB HI-Fi’s current New Zealand locations might also be possible if they were sold to order, the so-called ‘‘endless aisles’’ concept.
JB Hi-Fi has dabbled in the New Zealand appliance market before, buying Hill & Stewart in 2006 to give it a foothold in the Auckland market. It shut the chain completely four years later.