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No Decision Yet On The Good Guys CEO Job Claims New JB Hi Fi Boss

JB Hi-Fis new boss Terry Smart has told ChannelNews that he has still not decided on who will be the next CEO of JB Hi Fi.

Smart who was anointed yesterday as the new group CEO of JB Hi Fi admits that one of the big decisions ahead is “how to grow” Australia’s most successful consumer electronics and appliance retailer, and that another acquisition is an option for the group going forward.

Smart the former CEO of The Good Guys was responsible for a major turnaround of the Good Guys after JB Hi Fi acquired the business three years ago.

Earlier today JB Hi Fi shares rebounded to $45.99 after slipping 6.8% yesterday on the announcement that 18-year veteran Richard Murray the former group CEO of the big retailer was exiting to take on the job of running Premier Investments retail division which owns a major share of Myer, which some analysts are claiming Premier Investments wants to take over and that Murray has the skills and knowledge needed to not only achieve this task but the run the business in the future.

Smart one of the original management team at JB Hi Fi was chief operating officer and Murray was chief financial officer when the business was acquired in October 2003.

The shares at the time traded at $1.55 today JB Hi Fi is a $5.5 Billion dollar Company with the shares trading at $45.99.

Sales have risen from $356 million in 2003 to $7.9 billion in 2020 with the business delivering 10.4% growth in the last quarter.

JB Hi-Fi’s net profit jumped 86 per cent to $371.7 million in the first half of 2021 and earnings before interest and tax soared 76 per cent to $463 million, boosted by strong operating leverage from elevated sales, fatter margins, and tight cost control. Sales rose almost 24 per cent to $4.94 billion.

Smart admits that relationships with brands are critical going forward, as several brands have during the COVID-19 crisis expanded their direct sell operations in Australia in direct competition with retailers.

“We believe that consumers still want to see and touch a product prior to buying and that retail stores will still be a key part of their retail buying experience in the future.”.

JB Hi Fi online is one of the most visited sites in Australia with the business set to exceed $8 billion in sales this year across their store and online operations.

Online sales were 14 per cent of sales in the December half and 7.5 per cent in 2020, compared with just 2.4 per cent in 2015.

Richard Uechtritz, JB Hi Fi board member and former CEO of the big retailer told ChannelNews that Smart was a logical choice. “We are lucky that we have people like Smart who has the experience and knowledge to immediately step into a key role. He was a logical choice”.

Terry Smart retired from JB Hi-Fi in 2014 but was lured out of retirement by Murray to run The Good Guys a business that he has basically restructured from the ground up. Under his watch sales have doubled, rising from $46 million in 2017 to $108 million in 2020.

“The Good Guys was his [Murray’s] signature acquisition but that business really started to turn around when Terry got back into The Good Guys,” fund manager John Sevior told the AFR.

Sevior, who has shares in both Premier and JB Hi-Fi, said the company’s financial performance under Murray had been “incredible”, particularly during the pandemic.

Unlike Harvey Norman and Premier Investments JB Hi-Fi achieved strong profit growth without any government wage subsidies, and it continued to pay landlords.

Sevior said Murray’s biggest achievement was maintaining JB Hi-Fi’s unique culture – a focus on productivity, empowering staff and delivering the best deals for customers – which has been a major factor behind its success.

“Culture is a big part of JB Hi-Fi’s edge, and he was a terrific leader at keeping that culture going,” he said. “The culture was established by Richard [Uechtritz] and carried on by Terry and now it’s back to Terry.”

 

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