When John Barbuto (JB) opened up his first shop in East Keilor, Victoria in 1974, his philosophy was to provide a specialist range of hi-fi products and recorded music to the public.
The national breadth and solid market reputation JB Hi-Fi (ASX: JBH)has achieved since then is something even he probably didn’t dream of. Today, the company claims to be the largest retailer in the home entertainment market. And with its ‘JB… You’ve done it again’ slogan and big bright yellow buildings, it has certainly become one of the most prominent brands in the consumer space.
Within its first quarter of a century in business, there were nine JB Hi-Fi stores opened. The retail chain was then purchased by private equity bankers and senior management in 2000, who put a strong focus on making the retailer a national organisation. Leading the management buy-out was CEO, Richard Uechtritz, who has spent over 20 years in the retail industry and who co-founded Rabbit Photo and Smith Kodak Express. He was also the director for Kodak Australasia.
“Being part of the management buy-out of JB Hi-Fi has to clearly be the highlight of my working career,” he said. “Not many people get an opportunity to grow a company that was capitalised at $22 million and has now been capitalised at $1.8 billion – that growth in eight years has been tremendous.”
Uechtritz insists there are no magic tricks when it comes to developing and growing a retail business of JB’s stature.
“I don’t think there’s any challenge on a day-to-day basis that’s not different to running any other retail business,” he said. “You have to ensure you do all the small things right and end up with something that’s successful and substantial. There’s no magic to it and there’s no one particular thing you have to do.”
One industry trend that has stood out to Uechtritz over the past eight years is the increasing divide between the bigger retailers, who keep getting bigger, and the smaller players who are increasingly falling by the wayside.
“Harvey Norman has been big in IT for a long time, but it’s the growth of companies like us, The Good Guys and other people in that area that control significant market share,” he said. “We’ve had good sales growth of over 40 per cent and earnings growth of over 60 per cent. There aren’t too many companies in the country that are performing like that.”
JB Hi-Fi began playing in the PC space a couple of years ago and established a dedicated IT and computer store in Melbourne’s CBD earlier this year. One key piece of advice Uechtritz offered was that retailers should stick to doing some things well in their business instead of trying to be everything to all people.