JB Hi-Fi Reports Strong Results, CEO To Step Down February 08, 2010
- Global
| Retail
By Lars Brandle, Brisbane
Australian music, home entertainment and electronics retailer JB Hi-Fi today (Feb. 8) announced another blistering set of financial results and revealed that the executive who engineered the company's success would depart in the coming months.
Richard Uechtritz, CEO of Melbourne-based JB, will retire from his position in July/August after 10 years at the helm. His successor is COO Terry Smart, who joined JB with Uechtritz back in July 2000 to lead a consortium of private equity investors in a management buy-in.
News of Uechtritz's departure was the only shock in another stellar financial performance. JB made a mockery of the fragile retail sector, reporting a record half-year net profit of $76 million Australian ($66 million), up 29% from $59 million Australian ($51 million) in the corresponding period of 2009 and in line with expectations.
Group sales scaled a new high, reaching $1.55 billion Australian ($1.35 billion) in the six months ending Dec. 31, 2009, up 23% from $1.26 billion Australian ($1.09 billion) the same time a year earlier. Same-store sales during the six-month period were up 9.9% across the group; JB's 124-store Australian operations registered 10.2% comparable growth across, while its 10 stores in New Zealand achieved 5.8% same-stores growth.
"JB has proven to be very resilient throughout the economic downturn which led to low consumer confidence and spend," said Uechtritz. "This performance is testament to our strong retail model and the depth and strength of our management team."
JB Hi-Fi is Australia's runaway market-leader in CD album sales. Although official figures don't exist, label sources say more than four in every 10 albums sold down under have been rung up in JB's tills. The company's business-model is widely seen a major factor behind Australia's buoyant CD albums market which, according to new ARIA trade data, slipped just 1% in value for the calendar-year 2009.
"Music has performed very well [for us]," Uechtritz tells Billboard.biz, "and we will continue to invest in it in a similar fashion as previously." When asked whether JB had pushed its CD album market-share above the 40% mark, Uechtritz was elementary. "It's hard to put a handle on market share however I would think due to our music sales performance we have increased market share by a few points."
The JB chain is in the midst of a growth-spurt. The firm opened 15 new stores in its six-month financial period, en route to its ultimate target of having 210 JB Hi-Fi branded stores in operation within five years. A further seven stores are targeted to open in the second half of full-year 2010. At present, the group has 134 outlets, of which 122 are JB Hi-Fi branded shops.
Chairman Patrick Elliott today paid tribute to the outgoing chief's "huge contribution" to the group. "During his tenure as CEO, revenue has grown from $145 million Australian ($126 million) to a forecast $2.8 billion Australian ($2.43 billion) in the current financial year," said Elliott, "and JB Hi-Fi has been established as one of Australia's most recognized retail brands."
Uechtritz has aesthetic plans on his mind. "On a personal note, it is time for me," he noted. "Ten years is a good innings as a CEO. The company is in great shape - with a strong balance sheet and good growth prospects. I will be leaving to pursue my personal and philanthropic interests that being a full-time executive does not allow."
Uechtritz will rejoin the board as a non-executive director in early 2011, and will continue with the company in a consultancy role for a further three-years.
Despite today's excellent financial report, the markets reacted to news of Uechtritz's exit. Stock in JB on the Australian Stock Exchange slipped slightly from an opening price of $19.430 Australian ($16.88) to close at $19.07 Australian ($16.57).
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