JB Hi-Fi CEO Richard Murray says it’s all about keeping things lean
In a difficult year for retail, JB Hi-Fi remains a retail phenomenon.
With the collapse of Dick Smith and other retailers struggling over the past 12 months, JB Hi-Fi is not only returning strong profits but has also taken over another significant electrical retailer, The Good Guys.
In the half year, sales have jumped 23.6% to $2.6b. Underlying earnings, before interest and tax jumped 30% to $180b, with net profit up by 31%.
The figures show underlying growth sitting inside the business, as well as the boost from the Good Guys takeover
CEO Richard Murray explained the success to Money News’ Ross Greenwood.
‘Australians love consumer electronics’.
He credits his staff with creating the right retail environment.
‘You have to work hard to get that customer, and get that market share’.
Ross noted that the company is renowned for getting the maximum bang for the shareholder’s buck. In figures from the Wall Street Journal, the return on equity sits at 40%, with return on total capital around 30%.
Murray agreed that the strong results are all about keeping the operation lean.
‘It’s pretty low margins… you can’t always control the price a product’s being sold for, but you can control what it costs to run the business’.
Speaking on recent retail collapses, Murray said ‘You really feel sorry for the staff… but the reality is, we need to run sustainable retail models’.
Listen to the full interview here: