JB Hi-Fi is in talks to acquire competing electronics and appliance retailer The Good Guys, which could expand its home appliance footprint by 100 stores.
Following speculation published in the Australian Financial Review this morning, JB Hi-Fi chief executive Richard Murray confirmed discussions were still in preliminary stages, and said there has been no official agreement on an acquisition.
He added that The Good Guys is looking at a number of options including a public listing on the Australian Stock Exchange.
“JB Hi-Fi evaluates all possible opportunities against a range of factors and would only pursue an acquisition if it made compelling financial sense for our shareholders,” Murray said in a statement.
While The Good Guys is traditionally known as a home appliance retailer, the Australian company also sells a range of PCs and accessories from the likes of HP, Acer, Asus and Lenovo. The Good Guys is also an Apple premium reseller.
JB Hi-Fi announced its plans to expand into the connected home market in February 2015, taking on chief rival Harvey Norman.
During the Macquarie Australia conference earlier this month, Murray said the company plans to open 75 JB Hi-Fi Home appliance stores by the end of 2017.
According to Fairfax, JB Hi-Fi is the frontrunner for The Good Guys acquisition, followed by Freedom Furniture’s owner Steinhoff International and investment firm Bain Capital.
JB Hi-Fi expects to have 179 stores in Australia by the end of the 2016 financial year, including 58 Home stores.
The company expects sales for the 2016 financial year to grow to $3.9 billion, which would represent an increase of $300 million from 2015.