JB Hi-Fi's chief executive-elect, Richard Murray, has flagged plans to build a world-class supply chain and logistics system to support the retailer's expansion into new markets and categories.
Mr Murray says he is committed to growing the HOME household appliances concept and commercial unit championed by outgoing chief executive Terry Smart, even though they have yet to generate significant returns for shareholders. ''They're two massive opportunities,'' the 37-year-old father of four said.
''We want to build a $500 million commercial business and we see 50 HOME stores [with] $5 million in incremental sales - that's $250 million and that only gives us less than 5 per cent market share,'' he said. ''We'd like higher market share than that.''
Mr Smart, 48, shocked investors on Wednesday by announcing plans to retire in August, four years after taking the helm from Richard Uechtritz, bringing to an end his 14-year career at the chain of electronics shops.
Mr Smart said the appointment of Mr Murray, who has been his right-hand man and chief financial officer for 10 years, would ensure JB Hi-Fi's unique low-cost and innovative culture was maintained.
''It just felt that now was the right time,'' said Mr Smart, who will take six months' holiday before exploring new opportunities next year. ''The business is in great shape and continuing to grow and has a great reputation and we're entering into new categories and still opening new stores,'' he said. ''Most importantly, the time is right for Richard - he's a worthy successor and he knows the business and lives the culture the same way I do. It would have been way too risky to have gone outside, not that we needed to.''
Mr Smart's surprise departure, which sent JB Hi-Fi shares down 16¢ to $20.64, follows rumours that Wesfarmers, which is cashed up after selling its insurance business, may be running a ruler over the $2.1 billion company.
Mr Smart and Mr Murray said there was no substance to the takeover rumours and JB Hi-Fi had not been approached by any suitors.
Deutsche Bank analyst Michael Simotas said the resignation of a CEO after a relatively short tenure was never a good sign but he took comfort from the fact that Mr Murray was a capable replacement.
Mr Murray, who bought his first stereo from JB Hi-Fi at the age of 12 with $1500 saved from his paper round, said he had no plans to tweak the company's strategy. The strategy has underpinned six-fold growth in sales and shops in the past 10 years and has seen profits rise from $14 million in 2004 to at least $126 million this year.
JB Hi-Fi also issued a trading update, reporting solid 3 per cent same-store sales growth and gross margins for the March quarter, and reaffirmed full-year forecasts. Sales are expected to rise between 6 per cent and 8 per cent and net profit is expected to climb by up to 10.8 per cent, to $129 million.
