JB Hi-Fi chief executive Terry Smart has defended his company, saying tech entrepreneur Ruslan Kogan’s description of JB Hi-Fi as “Apple’s bitch” because 30% of the retailer’s sales come from Apple products is “way off”.
“Let’s not let facts get in the way of a good story… he is just so way off in his estimates, and I’m not even sure where he got that from. I wish we were doing that much,” he says.
“That figure is not even close to reality. We don’t have a big enough supply that represents such a substantial part of the business.”
Smart’s comments come after Kogan claimed at the KickStart conference in Brisbane yesterday that not only do Apple products make up 30% of JB Hi-Fi’s revenue, but that when Apple decides to kill its third-party networks bricks and mortar stores it will be left in the lurch.
Kogan claims the 30% figure comes from investment bankers who manage funds for substantial shareholders in JB Hi-Fi, and says while he may not know the exact figure himself, those sources claim insider knowledge.
“I’m not privy to their details of the accounts. All I know is that the people I spoke to are significant shareholders – and I’m talking multiple percentage figures in ownership – and those were the statistics revealed to me.”
Kogan would not name the shareholders he talked to. JB Hi-Fi’s latest financial report shows substantial shareholders including Integrity Investment Management, National Australian Bank and Concord Capital.
However, Smart says the company does not divulge breakdowns for sales categories to even its substantial shareholders, and maintains that even if the demand for Apple products were higher there would be no problem in making them represent 30% of sales.
“We are led by the customer,” he says. “If the customers want to buy our products, we’ll sell them. We don’t put caps on what we wish to sell in particular areas. We meet the customer demand wherever it is.”
But Kogan maintains he wasn’t saying JB Hi-Fi was doing anything wrong – he simply says they are too exposed to a product base that may not exist in third-party networks a few years from now.
“I never said it’s a bad thing. I just said they’re Apple’s bitch… Apple is the genius here creating all of these products, and they are a unique company,” he says.
Kogan points to the growth of both official Apple stores and the Apple online store, arguing that when the company decides to maintain all of its sales through its own infrastructure, then third-party resellers, such as JB Hi-Fi and more specialised stores such as MacBytes, will be left in the lurch.
“There will be a point soon where there is no value for Apple to distribute these products through a third-party network. And then these stores will be in trouble.”
“I can’t comment on things I don’t know first-hand. All I was told is what these investment bankers told me, and I think if you see the number of Apple displayers in a JB Hi-Fi store, and the number of people looking at Apple products… you can make up your own mind.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
