You’ve seen them pretty regularly on the site, both for their reviews and occasionally for their deals. I’m talking about JB Hi-Fi, which is about to get a whole lot bigger after they announced they would acquire The Good Guys for a whopping $870 million.
The announcement was made via a release to the Australian Securities Exchange early this morning, with the company saying that the purchase of the business was “expected to complete in late 2016 or early 2017”.
According to JB’s investor presentation, The Good Guys has around 101 stores across Australia. Once the buyout is finalised, the combined JB Group should have a larger market share of consumer electronics and home appliances than their closest rival, Harvey Norman.
JB also noted that they expected the slide in physical software sales (music, movies and games) to continue as more and more customers buy digitally. “This decline in traditional physical software sales will have an adverse impact on the Combined Group’s financial performance and position if such decline is not offset against sales growth in other existing or new product categories,” the presentation added.
Richard Murray, CEO of JB Hi-Fi, said that The Good Guys was a “high quality Australian retailer” and that the business was a natural acquisition.
“The acquisition is a very attractive strategic opportunity for JB Hi-Fi since The Good Guys is a highly complementary business which is aligned with our management philosophy and significantly enhances our offering in the $4.6 billion home appliances market,” Murray said.
He added that The Good Guys CEO Michael Ford would continue to lead The Good Guys once the buyout is complete.
The companies combined will have around 280 stories nationwide. JB also noted that the closing of Dick Smith Electronics has “contributed positively to sales growth” in the first two months of the 2016-17 financial year.
Comments
26 responses to “JB Hi-Fi Is Buying The Good Guys For $870 Million”
My one and only games purchasing experience from Good Guys was a disaster, so this is a good thing on a selfish note.
Less competition – especially in the more niche electronics spaces – isn’t a good thing. Harvey’s and Good Guys are notorious for their RRP price tags. I only go there on Father’s Day or Mother’s Day looking for whitegoods as gifts 😀
At both HN and GG, the sticker price is the starting point for negotiating. Haggle!
I have found GG to be consistently cheaper.
When I was buying a Washing Machine the Good Guys gave me a price of about $750 including Delivery and Removal, but wouldn’t budge on their sticker price. Harvey Norman dropped the Sticker Price but their high Delivery and Removal Price put them at $750. Appliances Online delivered in 3 days and charged me $650 total for Machine, Delivery and Removal.
I feel a bit guilty about using them to look at the physical machine before purchasing, but considering the lies both sales staff told me about it being too small.
History Repeats itself… Look how well that worked out for Clive Anthony’s
Perhaps. Difference is though, Clive Anthony’s was a basket case of a business with little goodwill from a brand perspective.
Clive Anthony’s was bought by JB Hi-Fi which went on to form the foundation of their JB Hi-Fi Home stores.
It served its purpose.
I can feel the spirit of competition leaving. So glad we pay the ACCC to police this stuff for us(!)
The ACCC approved it before they even made an offer. Unfortunately, though it does seem like less competition in this market can’t be a good thing. O
At the end of the day though, is this really going to affect the consumer that much aside from the obvious more jb hifi stores? As far as retailers go, JB are on the better side of things in terms of range and price. They still have to compete with several other stores in their market who overcharge typically. Not to mention you can buy a lot of the products JB etc sell online.
The only time the ACCC is going to block a buyout is if the end result was a monopoly, or say, Telstra purchased Optus. In that case, Telstra would have close to a monopoly anyway because the other conglomerate would not be able to compete with something that massive. Much like the TPG buyout of iiNet, there is still competition in the market even with the buyout, so there is no real reason for the ACCC to take action here.
Every time I enter a JB Hifi store I see the white goods section gradually get bigger, while pushing the shrinking video games section further to the back of the store. It’s a bit sad..
It’s our own fault – I think a lot more people (myself included) are buying more digital and less physical these days compared to, say, the previous PS3 / 360 generation.
Definitely. I’ve completely stopped purchasing physical games, even on PS4. Much less clutter around the house, and in the event of a catastrophe at home (fire or theft) I’ll only have to replace the PS4, not the entire game collection.
I love digital but man, a lot of the time it’s more pricey than the physical copies…..
Not really. I’ve been able to get many PSN titles for cheaper than retail at release. Of course it required planning well in advance, I just bought PSN cards on special at Coles and 7/11.
Add to that if you’re patient the PSN has some very good sales. Uncharted Collection went as low as $40 less than 3 months after release and Infamous Second Son is currently on sale for $14. Add discounts by buying PSN cards on special and you really can get digital copies for very cheap.
Yeah, I just bought Wofenstein: The New Order for $13-something last week. Haven’t even tried it yet because I’m still working through my backlog from the other sale about a month ago.
Do PSN cards go on special? (A la ITunes cards) that never happens with Xbox
There are always roundabout ways to go about it. E.g. if you keep an eye on sites like OzBargain etc, occasionally you’ll see that there will be a discount on vouchers for stores like Coles, Woolies etc. So you can get a voucher for one of those shops for, say, 15% off, then use that voucher to buy PSN / XBL card.s So you’ve effectively got 15% off the PSN/XBL card by buying the store card as an intermediate step.
EDIT:
You can also keep an eye out for discounts on the PSN / XBL cards themselves eg:
https://www.ozbargain.com.au/product/psn-card
https://www.ozbargain.com.au/product/xbox-live
https://www.giftcardsonsale.com.au/tag/playstation-network/
https://www.giftcardsonsale.com.au/tag/xbox-live/
Must be Xbone prices. 🙁
I haven’t stopped buying physical completely, but it depends on the game. If it’s something that’s going to soak up dozens / hundreds of hours, like a Battlefield or Fallout or whatever, then I’ll go digital just for the convenience of not having to keep putting the disc in and out again and again for months on end. Something which I can knock over in a week e.g. an Uncharted or something like that, and might only go back to replay once a year or so then I go physical just so I can install it, play it, delete it, then reinstall when I want to replay without having to download it all again.
since fallout 4, ive given up on physical unless theres a shiny collectors edition. have to download most of the game anyway why not the whole thing
I buy physical a lot still. The thing is though… is I never buy at the prices they want.
I’m an old fogey and prefer buying physical copies. Sometimes I tilt at windmills about games, toys, and things, that used to be physical things that you had and were under your control, becoming services and under the control of the service provider.
I’m not very good at the windmill-tilting, though, because I’ve also bought quite a few digital things. Usually when it’s a lot cheaper than the physical copy, or there’s no chance to buy physical.
Buying the Good Guys will actually help you here.
JB will now have 100+ new stores dedicated to selling whitegoods so can scale back the amount of whitegoods in their existing stores.
Time to buy their shares?
Probably too late now that the buyout has already been announced.
The market moved on this announcement back when they were investigating the acquisition to make sure it wouldn’t harm competition.
Thought I would be able to see a funny meme of Good Guys staff looking like Goths but nada.
So does this mean that JB envisions themselves getting out of games?
We’ve already lost The Good Guys, Kmart, Dick Smith, Myer and Game
Nope. It’s see this as a positive for games, movies and music buyers.
They will have 100+ Good Guys stores selling whitegoods now. Which means they can ramp down the amount of space they have dedicated to whitegoods in their current stores. This will open up room for more electronics and software.