Electronics and whitegoods retailers have a reason to be “worried” about JB Hi-Fi’s potential takeover of The Good Guys, according to an industry heavyweight.
JB Hi-Fi revealed yesterday it is holding “preliminary discussions” with The Good Guys regarding a possible acquisition.
“JB Hi-Fi has made no decision and nor has it entered into any agreement with respect to the acquisition of The Good Guys,” the electronics retailer told the Australian Securities 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.”
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John Winning, chief executive of the Winning Group, told SmartCompany the small business community should take notice of the potential merger between two of Australia’s largest consumer electronics and appliances retailers.
“I’d certainly be worried if I was a small ‘ma and pa’ retailer, the ones who’ve had an old family business or a franchise of another large organisation,” Winning says.
“There’s very few of those retailers left and they’re the ones that give a great customer experience. Sometimes they’re the only retailer in town.”
Winning says despite his business turning over almost half a billion dollars, even he will feel “dwarfed” if a merger goes ahead.
“It’s hard to think about what would happen if we were doing $5 million,” he says.
“If I had a business that was doing $50 million, I’d still be worried … but it’s going to be business as usual [for us] and we’ll continue to try to win the battle by giving a superior customer experience.”