JB Hi-Fi enters new market with acquisition of Victorian laundry, kitchen goods retailer e&s for $50m

Consumer electronics behemoth JB Hi-Fi will tap into commercial builders and deepen its exposure to the white goods sector with the purchase of Victorian kitchen, laundry and bathroom products retailer e&s. Shares in JB Hi-Fi closed up 8.4 per cent to a record high of $73.02 on Monday after revealing it had inked a deal for an initial acquisition of 75 per cent of e&s for a cash consideration of $47.8m. JB Hi-Fi has also put an option to purchase the remaining 25 per cent in September 2029. It marks JB Hi-Fi’s first acquisition since 2016, when it purchased The Good Guys for $870m. The purchase of e&s — which has 10 showrooms in Victoria, as well as a presence online — provides JB Hi-Fi with new and expanded customer segments and product categories. With another showroom set to open in the ACT this month, JB Hi-Fi plans to expand e&s in Victoria and nationally. “e&s is highly complementary to our existing business in that it’s in the appliances space, but what it does do is it gives us access to a new market,” JB Hi-Fi group chief executive Terry Smart told The West Australian. “It gets us access into the premium end of the home appliance market, plus it gets us access to commercial construction, boutique and volume builders and architects where today, our brands don’t participate in.” e&s was founded in 1962 by Bob Sinclair and his two brothers. It is now run by Bob’s son, Rob, who will remain managing director under JB Hi-Fi’s ownership. Its offerings range from bathtubs, shower sets and basins, to barbecues, fridges and washing machines. In the 2024 financial year, e&s reported revenue of $230m and adjusted earnings of $7m. Rob said JB Hi-Fi’s investment demonstrated its confidence in the business model and the opportunity for strong future growth at the premium end of the sector. “This partnership will allow us to expand our reach and continue delivering exceptional service and top-notch products to our valued customers,” he said. “It will be business as usual at all existing stores. Our customers can expect the same excellence they have come to know and trust.” The announcement came the same day JB Hi-Fi unveiled its full-year results, kicking off the first big week of reporting season in Australia. Total sales across its Australian and New Zealand businesses were flat at $9.59 billion in the 12 months to the end of June, while net profit plunged 16.4 per cent to $438.8m. The retailer also rewarded investors with a special 80¢ a share dividend. JB Hi-Fi sales in Australia grew just one per cent to $6.61b, with comparable sales up 0.6 per cent driven by “well-executed” Black Friday, Boxing Day and tax time promotions. The key growth areas were mobile phones, small appliances, cameras, games hardware and services, with Mr Smart once again reiterating the tech category is “becoming less discretionary”. “Consumers will upgrade (to the latest tech) . . . they just want to get it at best value, but they want to buy it,” he said. “When you get to the home appliances side of it with The Good Guys, what we’re seeing there is it’s a little bit more of a grudge purchase but they need to replace it.” Mr Smart said customers were also trading down to a different brand or a lower spec model in the home appliances category. JB Hi-Fi sales in New Zealand soared 12.3 per cent to $NZ327.9m ($299m) but revenue across The Good Guys portfolio was down 4.8 per cent to $2.68b. “In this tough retail environment where customers are seeking value, our brands continue to resonate strongly driven by the trust customers have in our low-price best value proposition,” Mr Smart said. In a trading update for the new financial year, Mr Smart said sales momentum had carried through to July, with JB Hi-Fi Australia comparable sales growth of 5.2 per cent. “What that means for the outlook it’s really hard to tell, it’s been quite a mixed result over the last calendar year,” he said. “What I can say though is that as a brand, we’re just focused on those customers that are buying and just making sure we give them the offer so that they choose us.” UBS analyst Shaun Cousin, who last month downgraded JB Hi-Fi to sell, said the full-year results was above market expectations.