With IT spending flat, JB Hi-Fi plots next evolution

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With IT spending flat, JB Hi-Fi plots next evolution

JB Hi-Fi is continuing to push into the connected home market, with two dozen JB Hi-Fi stores expected to be converted to its Home brand by the end of this financial year.

The retailer plans to have 52 Home stores by the end of the 2015 financial year with potential for 75 by the 2016 financial year.

The plans were detailed in today’s earnings results for the half year ending 31 December. JB Hi-Fi reported a 1.3 percent increase in sales to $1.97 billion but a 1.9 percent fall in net profit after tax to $88.5 million.

The report points to telco, fitness, games hardware and appliances categories as sales drivers.

Software including music, movies and games - but not computer software - suffered a 10.8 percent fall for the first half. Comparable sales were also impacted by a “market-wide decline” in the tablet category, particularly in the first quarter.

A significant portion of today’s earnings announcement was devoted to the expansion of JB Hi-Fi’s Home stores, which ranges from coffee machines home audio, surge protection, vacuum cleaners, washers, dryers, fridges as well as iPhones, computers and tablets.

Chief executive officer Richard Murray described the home appliance market as “larger than many categories JB Hi-Fi currently operates in”.

“As our suppliers direct their investment towards enabling the connected home, JB is positioning its model to be the consumer’s destination for this next technology evolution,” Murray stated.

A total of 14 JB Hi-Fi stores have already been converted to Home stores, with plans to convert 11 more during this financial year. By the 2016 financial year the company sees “potential” for 75 Home stores.

In addition to converting stores, JB Hi-Fi has also opened three new Home stores and plans to open and additional six this financial year.

Murray expressed confidence in the company’s momentum, for the second half, with January sales ahead of the same period last year.

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