Speculation that Coles Myer were set to purchase electrical and specialty goods retailer JB Hi-Fi has been dismissed after JB Hi-Fi chief executive Richard Uechtritz said “We are aware of the rumours but we haven’t had any discussions with Coles Myer whatsoever,” he said.
What is not known is whether the buyers of Myer department stores Newbridge Capital which includes members of the original Myer family included clauses in the purchase contract that prevents Coles Myer from competing in selected markets such as CE products or electrical.If so a deal with either JB Hi Fi or Harvey Norman could not go ahead.
Several weeks ago Coles Myer executives are believed to have sized up the Harvey Norman business but dismissed the concept of purchasing the business because of the structure of the Harvey Norman licencee or franchise operation.
“We’re currently in the throes of developing our next five-year strategy and that will be a strategy that will take us from turnaround to growth,” a Coles Myer spokesman said this week.
According to the Melbourne Herald they said “As part of that process we’re looking at a wide range of options but at this stage no decision has been made.”
Coles Myer chief executive John Fletcher said at the release of its third-quarter sales last month that more detail on the five-year plan would be revealed before the retailer reported full-year earnings in September.
Last month, shares in JB Hi-Fi surged to a record $5.55, fuelled by speculation that Coles Myer, cashed up from the sale of its Myer chain, was eyeing the business. Some industry observers say JB Hi-Fi, which Coles Myer did consider buying before it was floated on the stock exchange in 2003, would fit in with the company’s inclination for high-volume retail.
It would also help it gain a foothold in the electrical goods market, somewhere its rival Woolworths already sits with its Tandy chain. Shares in Coles Myer closed 15c lower yesterday, at $11.44.