The number of Home store could be much higher than 75 if JB Hi-Fi is the successful bidder for Andrew Muir’s 100-store home appliances chain The Good Guys.
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JB Hi-Fi says it has been holding preliminary talks with The Good Guys but there has been no agreement or decision made to acquire the whitegoods retailer.
The Good Guys announced in April that they would explore an initial public offer and listing on the Australian share market.
JB Hi-Fi described the talks as “preliminary and exploratory in nature” and emphasised no decision on a purchase had been made.
However, recent IBIS analysis suggests that a Harvey Norman-The Good Guys combined operation would still have less than 30% of the domestic appliance retail market with JB Hi-Fi on ~14%.
“JB Hi-Fi understands that The Good Guys are looking at a range of options including an IPO on the ASX”.
Mr Murray said JB Hi-Fi would only pursue an acquisition if it made “compelling financial sense for our shareholders”.
A JB Hi-Fi acquisition would give it a larger market share in terms of store locations by adding to its network, which is due to reach 194 outlets by the end of the 2016 financial year.
JB Hi-Fi, advised by Macquarie Capital, appears to have emerged as the front runner among trade buyers and has edged in front of Steinhoff International, which owns furniture retailer Freedom.
Taking over The Good Guys would boost JB Hi-Fi’s footprint to nearly 300 stores.
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Earlier this month JB Hi-Fi confirmed it still expects total sales of around $3.9 billion in 2015-16, up from $3.65 billion in 2014-15, and net profit in the range of 143 million to $147 million, up from the previous year’s $136.5 million.
