Gerry Harvey outlines growth strategy after hitting rock bottom

After experiencing small patches of growth through the autumn and winter months, Gerry Harvey is predicting resurgence in retail sales in the lead-up to Christmas.

In an interview with ABC TV’s Inside Business program yesterday, the Harvey Norman chairman said a stable government, the mining industry, low interest rates and, especially, a nascent housing boom will provide a fillip for all retailers.

“I think there will be a lot more building going on in terms of high rises and houses generally,” Harvey said. “All the indicators are there for a pretty reasonable period through to Christmas and, hopefully, better than we’ve seen over the past couple of years.”

Harvey said the Harvey Norman business hit “rock bottom” last year and is now well into a turnaround period. He said there was plenty of encouragement in categories such as home appliances, bedding and furniture, and blamed Harvey Norman’s recent poor performances on its core technology categories.

“We’ve closed a few shops, which is foreign to us, [and] we’ve got no new shops opening, which is very foreign to us,” he said. “We’ve looked at our business and tried to figure out where we can make a bit of money, and we’re concentrating on whitegoods, small appliances, bedding and furniture

“The area we’ve been hit very badly [is] technology, where we were such a big player and still are — things like TVs and computers — that area has made life difficult to us, and we’ve hit rock bottom there.

“We had to reorganise out business. We are now back to growth again, albeit it won’t be too rapid.”

Harvey dismissed the suggestion that Harvey Norman would exit the technology category, saying it would remain an active and vibrant player.

Also ruled out was a return to lobbying for changes to the laws governing the GST on imports. Harvey and fellow retailer Solomon Lew joined forces in early 2011 to petition the then Gillard Government to impose the GST on overseas purchases under $1,000, which are currently exempt.

Although Harvey still believes in the cause, he said he had no plans to pursue it.

“It’s terribly wrong that an overseas retailer can sell products without GST to undercut Australian retailers — that is just so wrong,” Harvey said.

Harvey expressed muted pleasure at Tony Abbott being elected prime minister and called on him to cut the red tape stopping businesses from innovating. He also called on more balance when setting award wages, especially in relation to penalty rates.

He said that while workers making money is good for retailers, if it goes too far, retailers cannot operate as the cost of doing business becomes too high.

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