The Good Guys & Harvey Norman Tipped To Be Hit By Masters Fall Out
The Good Guys, Harvey Norman and Aldi, could be hit hard in coming months as Masters gets set to dump millions of dollars’ worth of house brand and branded appliances into the market.
Between them The Good Guys and Harvey Norman Harbour over 62% of the Australian appliance market.
According to Masters management the company will discount out a range of appliances including ovens, refrigerators, as well as small appliances and electrical goods.
Sources at the struggling hardware group have said that there is “millions of dollars’ worth” of appliances sitting in warehouses ready to be discounted out at between 50 and 60%.
Masters stores will be shut before Christmas – and more than half a billion dollars of stock has to go first – at discount prices claims management that ChannelNews has spoken to.
Recently The Good Guys moved to expand their house brand offering in the appliance category, while Aldi has been witnessing a significant increase in sales of small and large appliances across their store network.
Closure of all 82 Masters sites in Australia will be completed before December 11, after Woolworths who own the Masters stores said this week it would sell the stores to the Home Consortium.
Also set to be discounted out is paint, timber, barbecues, vacuum cleaners – and everything else – worth between $600-700 million will be offloaded in a fire sale.
Woolworths stands to make net profits of $500 million from the sale.
The company has confirmed it will honour warranties, gift cards, returns and laybys.
Currently the hardware market is worth around $45 billion according to IBS.
In recent months both Bunnings and several other retail groups have moved to expand their small appliance offering the stock is being sourced via distributors who are getting the new products manufactured in the same factories are several leading appliance brands.
The big difference is that house brand products are often cheaper than the branded product despite there being little if any technical difference to the product other than shape.
The new owners – if Woolworths’ US partner Lowe’s agrees to the deal – will be the Home Consortium, which is comprised of the Arrum Group, Spotlight Group and Chemist Warehouse.
ChannelNews understands that some Masters site could be taken over by JB Hi-Fi, in a move that would be a threat to The Good Guys should they decide to do an IPO as opposed to a private sale to JB Hi-Fi. The move would allow JB Hi-Fi to significantly expand their appliance offering in direct competition with The Good Guys.