Strathfield to take on the big gunsAuthor: Sue MitchellDate:...

Strathfield to take on the big guns
Author: Sue Mitchell
Date: 27/02/2004
Words: 329
Source: AFRBreaking
Publication: Financial Review
Section: Companies
Page: 67


Car audio and mobile phone retailer Strathfield Group is preparing to take on the market leaders in the home-entertainment category as part of its sales and earnings recovery strategy.

Strathfield's plans to broaden its offering of widescreen and flat-screen televisions, notebook computers and DVD players will pit it against the acknowledged leaders in the market - Harvey Norman Holdings and Woolworths' Dick Smith and Powerhouse divisions.

Managing director John Winstanley has no qualms about competing against these much larger retailers, despite Strathfield's unsuccessful expansion into the home-entertainment market through its loss-making Hi-Fi Corp joint venture.

"It's all about being cleverly positioned," Mr Winstanley said yesterday after delivering the retailer's half-year profits.

"We don't have the range that Harvey Norman would have in widescreen or plasma ... but we still do very well because we offer a different price point and a different brand experience."

Strathfield's core car audio and mobile phone businesses scraped back into the black in the six months ended December 28 after aggressive cost cutting, posting a $13.24 million profit turnaround.

However, a 39 per cent drop in revenues to $100.56 million and continuing losses from Hi-Fi Corp, which has been whittled down to just one store, forced the group to report a consolidated net loss of $481,000. This was a big improvement on the $18.17 million loss posted in the previous December half but still fell short of investor expectations.

No interim dividend was declared and Strathfield stock - which floated in 1998 at $1.70 - fell 2.5y to 14.5y in heavy turnover.

Mr Winstanley expects the core business improvement to continue in the current half.