Woolworths puts entertainment rivals on notice
Wednesday, February 27, 2008/
Woolworths CEO, Michael Luscombe, has put Harvey Norman Holdings and JB Hi-Fi on notice by announcing a restructure of the company’s electronics business.
Earnings from the 400 Dick Smith, Powerhouse and Tandy stores increased just 5.9% to $43.1 million in the December half.
The business, which generates annual sales of about $1.2 billion, posted a 10.1% increase in sales.
Luscombe is said to be considering reducing the number of store brands, culling slow-moving merchandise, lifting marketing expenditure and changing store formats.
Luscombe has made no secret of the fact he wants Woolworths to become market leader in consumer electronics, ahead of rivals Harvey Norman and JB Hi-Fi.
Australia’s largest retailer yesterday reported a 28.1% increase in December-half net profit to $891.3 million.
The retailer remains on track to lift net profit for the year by between 19% and 23%.
Earnings from the Australian supermarket business rose 18.6% on a 7.8% increase in sales. Liquor sales rose $400 million to $2.5 billion.
In the general merchandise division, Big W increased earnings by 20.1% to $129.2 million on sales growth of 13.1%.