Harvey Norman records best trading results in 30 year history

By Kymberly Martin

As half-year sales shine.

“The best results for a long time with sales coming from across the board,” chairman, Gerry Harvey told AR. “There was strong demand for whitegoods, TVs, tech devices and air conditioners in particular, with great January/February business thanks to the hot weather, except for Western Australia,” he said.

Net profit after tax for the half-year ended December 2016 rose 39% to $257.29 million, the best ever trading result for a first half-year period in the company’s 30-year history.

“Oversees stores which have been a real problem right through the GFC have come into a profitable situation instead of losing money. All stores were strong except Northern Ireland which is almost there,” Harvey said. “Australia and New Zealand were particularly strong and Asia is improving as we speak and we will probably have the best year ever in Malaysia with indications sales will be even better next year.” Business in Slovenia and Croatia was improving with Croatia turning a profit after running at a loss.  “The store in Croatia is a large one so if we can turn that around and start making a reasonable profit we will open more stores there.”

He said sales are on track for the next half-year with business in January/February above the going rate for June to December. Every month has been good for business which we were flagging through the year. Harvey said there was no reason not to be confident about future sales. “We are not seeing any signs that sales will drop 10% or 20%”.

Online business is sitting at around 3%, and according to Harvey is not growing much with overseas online business similar to Australia “although it’s probably stronger here. In terms of total sales online is nothing and is an overhyped situation by many retailers”.

However Amazon could change all that with Harvey using fighting words: “As a corporate citizen Amazon score no points and don’t pay tax but at least they have to start paying GST. If they come in and start doing predatory pricing we will be attacking them on that front with full force. They are not going to worry us with bedding and furniture as they don’t sell much anyway.  The danger is that they will send a lot of retailers broke here as they have in the US. All those people they sent broke employed people who paid tax and contributed to the economy. If I was Donald Trump running Australia I would bar them entry and say guess what Amazon you are not coming here.”

He said some retailers are doing well, some are doing badly and some go out of business “but that happens every year”.

As for opening more stores, he said the group was concentrating on upgrading and enlarging existing stores, although two smaller stores in Ingham and Broome and a bigger one in Ipswich recently opened.  There are also plans to build a big centre at Macgregor in Brisbane on a recently purchased site.

Speaking about the recent fire in Mt Isa that destroyed the Harvey Norman store, he said it was important to get back into trading in the city as quickly as possible as it was the only retailer in town with the range of whitegoods and TVs. He said many regional cities Mt Isa and Broken Hill  can only support one major retailer: “if two go in you both lose money”.

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