Gerry Harvey's Chance Of Getting A Go At The Good Guys Is "Zilch" Say Insiders
Gerry Harvey’s chance of getting his foot in the door to bid for The Good Guys are “Zilch” according to insiders.
Currently JB Hi Fi is looking at whether they make a bid for the mass retailer. ChannelNews understands that the South African Group Steinhoff International have come back into the market and are now looking at whether they bid for The Good Guys, also running a ruler over the group is Bain Capital.
The Harvey Norman Chairman, claimed yesterday that he has only recently become aware that an information memorandum had been circulated by the Muir family relating to the sale of the mass appliance retailer.
Insiders have told ChannelNews that the reason that Harvey Norman was not given the memorandum was because the Muir family “do not want” and “will not deal” with Gerry Harvey due to a family feud that goes back to the days when Ian Muir first established Muir Electrical and Gerry Harvey tried to “nobble” his business they said.
Yesterday Gerry Harvey said that he was gathering his troops for his own bid and called on Australian Competition & Consumer Commission Chairman Rod Sims to discuss the matter.
“I would probably ring up Rod Sims and say ‘mate, what do I do?’ But I’ve only just found out (about JB Hi-Fi’s move) so l’ll have some time to think about it.’
Insiders at the ACCC have told ChannelNews that while there has been a call for “directions” by Gerry Harvey as to whether he would be allowed to bid there has to be a bid made by a party before the ACCC can commence an investigation.
“I would be interested in The Good Guys,” Mr Harvey said after JB Hi-Fi chief executive Richard Murray confirmed speculation yesterday that his retail group had held “preliminary and exploratory discussions”.
“It might be a bit difficult because the ACCC might knock me back, but if they are going to let JB Hi-Fi buy it, then they would have no reason they would stop me.
According to insiders the feud which evolved after Gerry was successful in stopping Ian Muir getting access to a buying group.
Ian Muir began retailing electrical goods in the Melbourne suburb of Essendon in 1952. Initial growth was slow, with 14 stores across Victoria and Queensland trading under the brand name Mighty Muir by 1992, when Ian and son Andrew renamed the chain of stores “The Good Guys”.
A strong advertising campaign in 1998 resulted in increased sales, driving rapid expansion of stores across the country. By 2009, the chain had grown to 89 stores across Australia. In 2012, there were 97 stores in Australia.
In January 2010, the retailer announced plans to expand into the New Zealand market, opening its first store in May at Wairau Valley in North Shore.
A second store at Botany Downs opened in July, followed by a third inManukau. By June 2014, there were five stores across the Auckland Metropolitan Area when the company announced it would pull out of the New Zealand Market citing poor returns. Following the announcement, The Warehouse Group agreed to take over the leases of the Good Guys stores and re-employ most of their local staff.
Questions have also been raised about the accuracy of IBIS Data relating to the Australian appliance market. IBISWorld estimates The Good Guys has a 12.5 per cent slice of the domestic appliance market, while JB Hi-Fi has 13.9 per cent and Harvey Norman is the biggest player with 15.3 per cent.
A JB Hi Fi board member told ChannelNews that this data is wrong and that JB HI Fi only has a very small share of the Australian appliance market.