JB Hi-Fi expands white goods presence with 75% stake in E&S Trading
JB Hi-Fi (ASX: JBH) will expand its customer segments and product categories with the $47.8 million acquisition of a 75% stake in Australian white goods supplier E&S Trading.
The consideration will be on a cash-free and debt-free basis, with JB Hi-Fi (which also owns The Good Guys chain) retaining the option to buy the remaining 25% in September 2029.
The electronics retail giant confirmed that the deal would give it a footprint across the kitchen, laundry and bathroom markets, catering to boutique and volume architects and builders as well as large commercial construction customers.
Strong synergies
E&S Trading is believed to be “highly complementary” to JB Hi-Fi’s existing brands and will allow the group to grow its nationwide presence—particularly in Victoria, where E&S has ten showrooms.
The company also has a strong online presence and plans to open a showroom in the Australian Capital Territory this month.
Rob Sinclair—whose family founded E&S in 1962—will remain as the company’s managing director upon completion of the transaction and operations at existing stores will remain unchanged.
JB Hi-Fi said E&S was a high-quality business with a premium product offering that would be a “strategically compelling addition” to the group.
Mixed earnings
News of the E&S acquisition follows reports of mixed earnings results for JB Hi-Fi during the 2024 financial year.
Net profit for the year to 30 June was down 16.4% to $438.8m but came in above analyst expectations of $423.1m.
Group revenue was impacted by a 4.8% fall in sales from The Good Guys to $2.68 billion, with the result affected by lower margins amid an increase in on-floor discounting, while earnings slid nearly 26% due to higher discounting and inflationary pressures.
Total sales at the group’s flagship Australian stores increased by 1% to $6.61b, driven by demand for technology and consumer electronics products.
Key categories were mobile phones, small appliances, cameras, games hardware and services.
Online sales for the division rose 2.8% to $1.03b, representing about 15.5% of total sales.
New Zealand sales
JB Hi-Fi’s New Zealand sales lifted 12.3% to NZ$327.9m following a host of new store openings, with comparable sales up 1.6%.
Gross profit for the division surged 18.8% to NZ$55.5m on the back of higher margins, although EBIT was still in the red with a negative NZ$2.3m, down NZ$6.7m from a year earlier.
The 2025 financial year is believed to have started strongly, with total Australian sales growth for July of 5.6% at JB Hi-Fi, while The Good Guys delivered 2.7% sales growth compared to the same time last year.