Friday

Short Retail Australia

1 Comment August 27, 2010 – 1:05 am |   | Permalink |  Print This Post |

We added another 300 shorts on JB Hi Fi at $20.09. The stars have aligned in JB’s favour in the last reporting period. No doubt it has a great business model (and its risky shorting good businesses with a dominant position) - but we can’t see the great times going indefinitely. Competition is intense, though JB’s model of targeting shopping centres is a unique one and distinct from the rest (Harvey Norman, Good Guys etc) that operate as a standalone outlet. Harvey Norman is very much an investment in property since they own their properties whilst JB rents. Recent news report of Harvey vs Kogan.com.au shows that dedicated online competitors are heating up. JB’s “Cheapest Price Daily” model with a budget store appearance works like a charm pulling the crowd in - not many know that Myer price matches, has a no-questions asked refund policy and has a great range (no we do not own Myer shares).