JB Hi-Fi splits commercial business into three new brands

Retailer JB Hi-Fi has split its commercial business and IT services arm JB Hi-Fi Solutions to three new brands as the company aims to grow the unit.

In an ASX announcement released today, JB Hi-Fi said JB Hi-Fi Solutions is being “repositioned” to operate under the brands JB Hi-Fi Business, JB Hi-Fi Education and The Good Guys Commercial.

The company also announced a new e-commerce platform aimed at improving the customer experience from onboarding to order fulfilment, and reaching more small to medium business customers. The company also announced the expansion of its dedicated telecommunications business channel.

JB Hi-Fi also announced new tailored products and services for business, government and education customers, and a new omnichannel experience for business customers of all sizes.

It also flagged the JB Hi-Fi Business, JB Hi-Fi Education and The Good Guys Commercial. brands in a list of business risks, stating that the brands “do not deliver the expected growth outcomes” for the group, but that is continues to invest in them to support growth and product and service offerings.

While it did not go into specifics, JB Hi-Fi said the three brands (collectively as the Commercial business), recorded "solid sales growth" after continuing to improve the customer offer.

In February, JB Hi-Fi said JB Hi-Fi Solutions posted ‘solid’ sales growth in the first half of FY2022 as it continued to expand its product and service offering. The company also reported the same business risk related to the unit in 2021.

These announcements were included in JB Hi-Fi’s final full year FY2022 results, which were in line with its unaudited results released in July.

In the 12 months ended 30 June 2022, revenue increased 3.5 percent year-over-year, from $8.9 million to $9.2 million. Online sales were also up 52.8 percent year-over-year to $1.6 billion, representing 17.6 percent of revenue. Net profit after tax was up 7.7 percent from $506.1 million in FY2021 to $544.9 million.

“We are pleased to report record sales and earnings for FY22,” JB Hi-Fi group chief executive Terry Smart said.

“These results reinforce the enormous trust our customers have in our brands and the strength of our multichannel offer, which continues to provide customers with choice on how to shop.”

JB Hi-Fi stated that it has continued to invest in its multichannel strategy across online and supply chain, including upgrades to websites and distribution centres, as well as expanded customer delivery options.

The increase in sales was driven by increased demand for consumer electronics and home appliance products, with growth in categories Communications, Visual, Small Appliances, Smart Home and Accessories. The growth also contributed to the increase in profit, despite a slight bump in its cost of doing business from 11.2 percent in FY2021 to 11.4 percent.

“As we enter an increasingly uncertain retail environment and household budgets come under further pressure, customers will gravitate to trusted value-driven retailers,” Smart said.

“Our ongoing strategy of providing customers with the best value and outstanding service every day, will ensure our brands continue to deliver for our customers and remain a destination of choice into the future.

“I would again like to thank our over 13,000 dedicated team members who remain focused on the customer and continue to adapt and respond to meet their needs.”