Narta chief executive Michael Jackson has used his first public comments since JB Hi-Fi Group announced it would end its membership to cast the split as a mutual strategic decision, while acknowledging that losing JB’s scale will force changes to the buying and services group’s income, cost base and structure.
Jackson said the decision followed agreement between the two organisations that Narta should focus on its strategy and independent members, and JB Hi-Fi Group on its own priorities. He said there had been no event, incident or disagreement that caused the exit, and that JB had not been asked to leave.
A mutual decision, not a rupture
Jackson’s account places the departure in the context of divergent priorities rather than a dispute. 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 — each carrying its own strategic requirements. Narta, by contrast, is a 61-year-old organisation whose stated purpose is to strengthen independent retail through collective scale, shared administration and services.
He said there was never going to be a perfect time to end the membership, but that a few weeks ago both sides mutually agreed on the way forward. The public announcement has since prompted what Jackson called an overwhelming response from suppliers in the first 24 hours. He said suppliers want a strong independent retail channel and understand the importance of choice, competition and balance in the market.
Scale, balance and the legacy of The Good Guys
Jackson traced the changing shape of Narta’s membership to JB’s acquisition of The Good Guys and the subsequent decision to bring The Good Guys into Narta. That move, he said, brought considerable scale but also created a significant imbalance across the membership. Soon afterwards, COVID-19 hit and years of extraordinary industry growth overshadowed many of those underlying changes. Businesses and the wider industry were largely focused on how well things were going.
The market now looks different, Jackson said, and Narta has recognised a greater responsibility to its shareholders and total membership over the past six months in particular. Even without JB, he argued that Narta remains a substantial business: core supplier purchases are well over $1 billion and collectively represent more than 20 per cent of the consumer electronics, camera and home appliance market. For suppliers, he said, that is significant value.
Jackson also set out the limits of the post-exit position. Narta will no longer be the largest buying group, he said, but collectively its members will remain number three. He described that as a significant market position that still carries value for suppliers and independent retailers.
From buying group to service platform
A central part of Jackson’s argument is that Narta’s value extends beyond buying. He listed services including forecasting, stock-on-hand visibility, end-of-life management, new model implementation, product content, training, predictive analytics, AI and automation. These, he said, are intended to help independent members compete with major retailers including JB Hi-Fi, Harvey Norman, Bunnings, Woolworths, Big W, Costco and Amazon.
Jackson said JB agreed during discussions with Nick Wells that Narta had taken the right path over the past five to six years by investing in and building its service infrastructure. Without those investments, he said, there was every chance Narta could have struggled to fulfil its responsibilities to members. But he also framed the post-exit period as a test of whether members will fully engage with those services and deliver value as a collective.
Suppliers are part of that test. Jackson said suppliers have told Narta that their cost to serve continues to increase, with the economy, rising operating costs and market conditions affecting them as much as retailers. He said suppliers will rightly challenge the independent channel if it cannot demonstrate efficiencies and a competitive cost to serve.
The cost of losing JB’s scale
The exit has direct financial and organisational consequences. Jackson said the loss of JB’s scale is significant and will have an impact on Narta’s income and operating costs. As a not-for-profit organisation whose members contribute to running costs, Narta will need to change its structure and cost base.
He acknowledged the human dimension, saying there will be difficult decisions, including redundancies and cost reductions across its board and executive structure. He stressed that retaining people and experience is important to the team, members and supplier partners, and that Narta’s priority is to remain financially sustainable while keeping the capabilities needed to deliver for members and suppliers.
The next 12 months
Jackson’s conclusion is that Narta’s purpose has not changed: it exists to strengthen independent retail, and he believes the need for a strong, connected and commercially effective independent channel is greater than ever. The immediate challenge is whether independent members will work together, use the services Narta has built and demonstrate collective value to suppliers.
Jackson said Narta will be judged by its collective actions over the next 12 months. That makes the exit less an endpoint than a test of the buying group’s service-led model — one that depends on member engagement, supplier confidence and a cost structure that can support both.