JB Hi-Fi enters new market with acquisition of Victorian laundry, kitchen goods retailer e&s for $50m

Consumer electronics behemoth JB Hi-Fi will tap into commercial builders and deepen its exposure to the white goods sector with the purchase of Victorian kitchen, laundry and bathroom products retailer e&s.

Shares in JB Hi-Fi were up 8.4 per cent to a record high of $73.02 just after 10am on Monday after revealing it had inked a deal for an initial acquisition of 75 per cent of e&s for a cash consideration of $47.8m.

JB Hi-Fi has also put an option to purchase the remaining 25 per cent in September 2029.

The purchase of e&s — which has 10 showrooms in Victoria, as well as a presence online — provides JB Hi-Fi with new and expanded customer segments and product categories. This includes premium home appliance customers, and boutique builders and architects.

“e&s have a highly complementary premium product offering, which will appeal to a new customer base, and a commercial construction market focus, making it a strategically compelling addition to the JB Hi-Fi Group,” chief executive Terry Smart said.

In the 2024 financial year, e&s reported revenue of $230m and adjusted earnings of $7m.

It marks JB Hi-Fi’s first acquisition since 2016, when it purchased The Good Guys for $870m.

The announcement came the same day JB Hi-Fi unveiled its full-year results, kicking off the first big week of reporting season in Australia.

Total sales across its Australian and New Zealand businesses were flat at $9.59 billion in the 12 months to the end of June, while net profit plunged 16.4 per cent to $438.8m.

JB Hi-Fi sales in Australia grew just one per cent to $6.61b, with comparable sales up 0.6 per cent driven by “well-executed” Black Friday, Boxing Day and tax time promotions.

The key growth areas were mobile phones, small appliances, cameras, games hardware and services.

JB Hi-Fi sales in New Zealand soared 12.3 per cent to $NZ327.9m ($299m) but revenue across The Good Guys portfolio was down 4.8 per cent to $2.68b.

“In this tough retail environment where customers are seeking value, our brands continue to resonate strongly driven by the trust customers have in our low-price best value proposition,” Mr Smart said.

In a trading update for the new financial year, Mr Smart said sales momentum had carried through to July, with JB Hi-Fi Australia comparable sales growth of 5.2 per cent.

“We will remain focused on our customer’s needs and continue to innovate as we navigate another uncertain year,” he said.

UBS analyst Shaun Cousin, who last month downgraded JB Hi-Fi to sell, said the full-year results was above market expectations.