The Good Guys Gets Smart New CEO
The old JB Hi Fi team is back together with Terry Smart the former CFO and then CEO of JB Hi Fi appointed as the new CEO of The Good Guys.
Reporting to Richard Murray who was in a past life was CFO of JB Hi Fi, reporting to Terry Smart, the decision to bring back Smart, to head The Good Guys which was acquired late last year for $870 million late last year has been described by some analysts as “A very smart move”.
The move that came ahead of the resignation of Michael Ford the current CEO of TGG, could herald a major restructuring of the way that The Good Guys do business with the operational side of the appliance retailer set to go under the microscope with insiders tipping a model similar to the way that JB Hi Fi operate.
One insider told ChannelNews “The only person missing to create the A Team is Scott Browning”.
Browning who has been credited with creating the JB Hi Fi brand and the marketing that now appeals to millions of Australian millennials is currently consulting. He left JB Hi shortly after Smart left the Company.
Terry Smart New The Good Guys CEO
Richard Uechtritz, who is now a board member at the JB Hi Fi and Terry Smart, then the group’s chief operating officer, led the private equity buyout of the group in 2000 and subsequent initial public offering in 2003.
Uechtritz and Smart are also part owners of the Queensland Book Distribution Company (UBD a business they invested in last year.
The relationship between JB Hi-Fi and its acquisition is about to move into a key phase following an extensive appraisal of The Good Guys operation by consultants appointed by JB Hi Fi.
Murray who was appointed as Group Managing Director after serving as the CEO of JB Hi Fi prior to the appointment of Cameron Trainor, left the business alone through the key Christmas trading period.
The planned three-year integration of The Good Guys into the larger JB Hi-Fi structure is now set to be implemented under the management of Smart who was responsible for the efficiencies that JB Hi Fi are often praised for.
JB Hi Fi who are currently in a strong position in the consumer electronics market, sailed through the various structural changes that have periodically affected the CE markets, including the growth of online and the collapse of several major competing retailers, including Dick Smith.
Throughout it has remained completely focused on defending its sales base, maintaining its ultra- low cost base and retaining its slightly edgy brand personality which was created by Browning.
The Australian said that ‘The continuity of the key members of its executive team and the seamless transitions from one CEO to another — seamless because the successions have been internal and because the handovers have involved executives who worked together over a long time — has been a key part of the steadfastness of JB Hi-Fi’s strategy’.
Bringing Smart back to the group in a position that reports to Murray, his former lieutenant and inverting their previous relationship, can probably only work because they worked alongside each other for more than a decade and share the same views on strategy and culture.
It is, at face value, a coup.
There was always going to be a question mark over whether The Good Guys’ Michael Ford, after 13 years of successfully managing and growing that group, would remain in place, reporting to Murray and accepting the inevitable changes to the business as JB Hi-Fi put its stamp on the model, long term.
Ford, who oversaw the shift in The Good Guys business model from one of joint ventures to a more conventional corporate model last year when he bought out the group’s partners and then pursued a dual-track IPO and trade sale process that culminated in the JB Hi-Fi deal, would inevitably see the start of the integration phase as the moment to consider taking a break and then looking for a new challenge.
The initial market reaction, where JB Hi-Fi shares rose slightly, would suggest that it didn’t need reassurance. Bringing back Smart, who JB Hi-Fi investors know and respect, might be unconventional but it is a very clever move.