JB Hi-Fi has released its end of financial year report, and commented on the numerous issues retail has faced over the last 12 months, along with what the company expects from the next financial year. The plan for the games division? Capitalise on store closures from “competitors” and push in “more competitive local pricing”.
JB Hi-Fi had a strong year overall with a sales growth of 7% in a notoriously difficult retail market, but their software division — which includes video games — is down 2.9%. And if you adjust for the fact JB Hi-Fi has opened a number of new stores, and run the numbers on a comparable store basis, the number is a slightly worse loss of 9.3%.
It’s worth noting that FY2012 was a difficult year for all retailers, specifically in video games, with GAME going into liquidation and closing all stores. These store closures are thought to be a good thing in the long term, but JB Hi-Fi believes it may have been problematic in the short term.
“While [store closure from competitors are] a long term benefit,” said the report, “there is a potential for further short term impact to gross margin as they clear stock.”
It seems that GAME’s massive clearance sales may have impacted on JB Hi-Fi’s numbers, at least in some small way.
JB is expecting big things from the 3DS XL and Wii U this financial year, but expects that “more competitive local pricing” will also drive growth, and hopes to mitigate the initial loss with increased stock. The report also briefly alluded to its decision to bring parallel imports into Australia in order to counter negativity over overpriced goods.
JB Hi-Fi also expects to open 16 new stores in the coming financial year.
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