Narta chief executive Michael Jackson said the decision by JB Hi-Fi Group to end its membership of the buying and services organisation was mutually agreed, and that no specific dispute triggered the exit. In his first public comments since the announcement, Jackson said both organisations had concluded that Narta should concentrate on its member strategy while JB Hi-Fi Group focuses on its own priorities.
Jackson said there had been no event, incident or disagreement behind the departure and that JB had not been asked to leave. The companies had agreed a few weeks earlier that separation was the best way forward, he added.
Scale and membership balance
Narta, which is 61 years old, was founded to serve independent retailers and has built its model around collective purchasing and shared services. Jackson said that without JB Hi-Fi Group, Narta still has a strong business, with core-supplier purchases well over $1 billion, and members collectively representing more than 20% of the consumer electronics, camera and home appliance market.
He also acknowledged the scale JB brought over more than 25 years. When JB joined, it had one store in Melbourne and one in Parramatta, Jackson said, and its growth into a public company could not have been predicted. Narta was proud to have been part of that journey, he added. The later acquisition of The Good Guys and its subsequent entry into Narta created a significant imbalance across the membership, according to Jackson, while the COVID-19 period overshadowed those changes as the industry experienced several years of extraordinary growth.
In today’s more challenging market, Jackson said Narta had a greater responsibility to shareholders and the full membership. He argued that the organisation’s role now extends beyond buying to services including forecasting, stock visibility, end-of-life management, new model implementation, product content, training, predictive analytics, AI and automation. Independent members, he said, need those capabilities to compete with major retailers such as JB Hi-Fi, Harvey Norman, Bunnings, Woolworths, Big W, Costco and Amazon.
Services and collective action
Jackson said Narta had spent the past five to six years investing in its service infrastructure and that JB agreed this was the right path. With JB leaving, he said, members must fully engage with those services and deliver value collectively. Suppliers want a strong independent channel and will challenge it if it cannot demonstrate efficiencies and a competitive cost to serve, he added.
He described JB Hi-Fi Group as a publicly listed company with four businesses — JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys and e&s — with its own strategic priorities. Narta, by contrast, would focus on its members and their ability to compete. Jackson said supplier response in the 24 hours since the announcement had been overwhelming and reinforced the importance of choice, competition and balance in the market.
Narta will no longer be the largest buying group, Jackson said, but will remain number three collectively. The loss of JB’s scale would affect income and operating costs, he said. As a not-for-profit organisation with members contributing to running costs, Narta will need changes to its structure and cost base, including redundancies and cost reductions across its board and executive structure.
Jackson said the priority is to keep Narta financially sustainable, retain the experience and capabilities needed by members and suppliers, and structure the organisation for the future. The impact on staff could not be ignored, he added. Despite the changes, he said Narta’s purpose remains to strengthen independent retail, which he argued is more necessary than ever.