JB Hi-Fi CEO Slams “Unsustainable” Dick Smith Retail Model
JB Hi-Fi chief executive Richard Murray has accused Dick Smith of having pushed an “unsustainable” retail model, The Australian has reported.
Following a progressive shut-down of stores this year, the final Dick Smith store closures took place last month.
Murray today made a few pointed observations about the Dick Smith retail model at the annual Stockbrokers Conference in Melbourne, according to the report.
“They (Dick Smith) did a $400,000 deal with eBay that torched the market price for PS4,” The Australian reported Murray as stating. “That’s not what we do, anyone can do a fire sale, it’s very easy to do.”
Murray noted a lack of long-term help to the challenges Dick Smith had faced.
“Dick Smith moved a lot of product, customers are very savvy … They picked up a PS4, but I’m not sure it actually helped anything long-term for the (Dick Smith) business around the challenges that they had, such as customer equity,” The Australian reported Murray as commenting.
Dick Smith had additionally been very aggressive with Apple.
“They were very aggressive on Apple and the problem they found was when they turned that aggressiveness off it hadn’t built the customer equity and therefore their sales declined,” The Australian reported Murray as stating.
Murray stated he believed Dick Smith had Apple on sale for 24 weeks out of 26, “constantly” using Apple as a loss leader, according to the report.
“Every retailer uses loss leaders to drive traffic, it’s a tried and true way, I guess it’s an issue of how often to use that loss leader and can you build customer equity,” The Australian reported Murray as stating.