Clive Peeters CEO Greg Smith who today reported a 90% decline in profits has said that he is open to takeover offers or a major new investor. He has also said that the board is currently considering several incomplete proposals from competitors to buy out the Victorian based consumer electronics Company.

Clive Peeters CEO Greg Smith who today reported a 90% decline in profits has said that he is open to takeover offers or a major new investor. He has also said that the board is currently considering several incomplete proposals from competitors to buy out the Victorian based consumer electronics Company.

Speaking to ChannelNews today Smith said that he believed that many Companies will between now and July 1 when new dismissal laws come into effect in Australia lay off thousands of workers and that appliance and consumer electronic sales will not pick up till the September October period.

He said “60% of our business is appliances and this side of our business is down over 12% while our consumer electronics business is up over 5%”.

On the question of New South Wales he said that the Clive Peeters group was suffering because of a lack of stores and that the Company has plans for 12 new stores in that State.

He said “We are pleased that there is continued improvement coming through in NSW despite the very depressed conditions in that State”.

Sales in H1 in NSW 2009 fell 7.6% on the corresponding period of the previous year, the best performance of our eastern states operations.  Our operating costs in Sydney were managed very carefully over the period and the final result was $1.6 million net operating loss after tax for H1 2009.  This compared to the H2 2008 Sydney loss of $1.8 million after tax, and to the H1 2008 Sydney loss of $2.6m after tax, so we are encouraged by this trend.

“To grow we have to invest in NSW and this is a top priority for the board going forward”. Said Smith.

On the issue of Dick Smith Vs JB Hi Fi he said “I agree with the sentiment that Harvey Norman could get hurt if there is increased competition between the Woolworths owned Dick Smith group who do have money and JB Hi Fi. I also agree with the sentiment that Dick Smith stores are traditionally small and they do not have the same brand recognition as JB Hi Fi. For example JB Hi Fi shift a lot of small cheap stock similar to Dick Smith for example our average sale is $800 vs $80 for JB Hi Fi”. 

Greg Smith added “with sales under significant pressure this caused increased competition and a sharp fall in gross margins over H1 2009 – the Company’s first margin decline in over 15 years, which says a lot about how challenging this retail environment is.

Greg Smith stated “these times demand strict management of inventories and cash flows, and we are doing well in these two areas.  Capital expenditure is under a tight hold, and no new stores are committed to or planned for calendar year 2009.

However on a positive note our pilots for kitchen and bathroom renovations (Moorabbin and Thomastown) and for a range of new technology, software and gaming product (Moorabbin) have both been launched in recent months and are showing promising early results.  We expect these product and services innovations to represent a platform for like stores sales growth as we roll them out to other stores when the retail cycle improves.