By Matthew Henry
SYDNEY: Gerry Harvey has revealed plans for up to 100 OFIS stationery stores across Australia within 10 years to break the stranglehold of Wesfarmers-owned Officeworks on the office supplies market.
The OFIS chain will debut early next year with a store in western Sydney’s Auburn and another in Albury in southern New South Wales, with the rollout continuing through 2008.
Harvey, the executive chairman of Australia’s biggest electrical retailer Harvey Norman, told the Sydney Morning Herald that he expects between five and eight OFIS stores to be up and running within 12 months.
“By this time next year, if I don’t have between five and eight stores, I will be disappointed,” Harvey said after yesterday’s Harvey Norman annual general meeting in Sydney.
Harvey also remains bullish for the company’s electrical retail business despite a recent rate rises and uncertainty regarding the federal election, and yesterday issued a profit guidance of 35 per cent growth for the first half of the 2007/08 financial year.|
Explaining the reason for his continued confidence in the Harvey Norman chain, Harvey told the Australian Financial Review, “the great thing about this technology, whatever you buy today, it’s cheaper next year and three to four years from now it’s useless and you have to buy another one.”
While the OFIS business is expected to take up to three years to reach profitability, Harvey told the SMH he would do ‘whatever it takes’ to ensure the new chain became established as the second player in the stationery retail market.
Wesfarmers bought the Officeworks business from Coles Group for $500 million, which saw Wesfarmers overtake Woolworths as the country’s biggest retailer.
But Harvey does not expect Woolworths to enter the fray.
“There is only room for two and I have even wondered if there is room for two,” Harvey said, quoted in the AFR.