JB Hi-Fi, the electronics consumer retailer, has announced its plans to acquire kitchen and laundry specialist E&S Trading in an effort to expand its product offerings. This move comes after JB Hi-Fi experienced 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 acquire the remaining 25 percent in September 2029. The acquisition will be funded using JB Hi-Fi’s existing cash reserves.
E&S Trading specializes in kitchen and cooking, bathroom, laundry and cleaning, alfresco, and heating and cooling products. Currently, the company has 10 showrooms in Victoria and a showroom in ACT that is scheduled to open this month. JB Hi-Fi, with its deep understanding of the homemaker sector and extensive experience in the appliance industry, sees E&S Trading as an ideal partner for its business.
Rob Sinclair, the managing director of E&S Trading, reassures customers that it will be business as usual at all existing stores and that they can expect the same level of excellence they have come to know and trust. Sinclair will remain as the managing director and will continue to employ the successful growth strategy on a broader scale.
Terry Smart, the CEO of JB Hi-Fi, believes that the acquisition of E&S Trading is a strategically compelling addition to the JB Hi-Fi Group. E&S Trading’s highly complementary premium product offering and focus on the commercial construction market will appeal to a new customer base. JB Hi-Fi expects to continue growing E&S Trading in Victoria and nationwide.
The announcement of the acquisition comes as JB Hi-Fi reports a decline in net profit for the last fiscal year. The company’s net profit fell 16.4 percent to $438.8 million from $524.6 million in the prior year. Total group sales also declined 0.4 percent to $9.59 billion. However, in Australia, sales grew 1 percent to $6.61 billion, driven by continued demand for technology and consumer electronics products, as well as successful promotional periods such as Black Friday, Boxing Day, and Tax Time. In New Zealand, sales climbed 12.3 percent to NZ$327.9 million, attributed to investments in new stores and initiatives.
On the other hand, The Good Guys, a whitegoods specialist owned by JB Hi-Fi, experienced a 4.8 percent decline in sales, amounting to $2.68 billion. Despite these challenges, JB Hi-Fi remains optimistic. For the month of July 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 also saw a 12.2 percent increase, although comparable sales dropped 4.9 percent. The Good Guys recorded sales growth and comparable sales growth of 2.7 percent.
CEO Terry Smart is pleased to see the sales momentum in Australia continue into July and remains committed to offering the best value and exceptional customer service. Despite the uncertainties of the coming year, JB Hi-Fi will remain focused on its customers’ needs and continue to innovate in order to maximize sales opportunities.
In conclusion, JB Hi-Fi’s acquisition of E&S Trading is a strategic move to expand its product offerings and appeal to a new customer base. While the company experienced a decline in net profit and sales in the last fiscal year, it remains optimistic about its future growth. By staying committed to customer needs and innovation, JB Hi-Fi aims to navigate the challenges ahead and continue its success in the consumer electronics market.
