Harvey Norman chairman, Gerry Harvey, is a happy man. “The best result we have put out in our life,” is how he described the retailer’s latest trading results to Appliance Retailer.
Total revenue rose 7.6% to $8.23 billion to the year ending June 30, 2020. Net profit jumped to $480.5 million, a rise of almost 20%.
Harvey said the strong sales were driven by Covid-19 and came from all departments, including furniture, bedding, computers and electricals. But he admitted he did not expect the results would be this strong.
“It was a combination of positive things that produced the unexpected boom and it came as a shock.”
Not only Harvey Norman, but most retailers in this space would be doing well, he said.
According to Harvey, sales for big screen TVs were a standout. “All the new technology has taken them to new levels which are much improved from the screens of five years ago. Computers are selling well too and everything in small appliances has gone through the roof.”
And the growth in sales is happening overseas. “In the eight countries in which we operate business has gone well. People are not eating out, not going on holidays and spending time at home. In many cases people have been given money by governments they normally would not have so it’s been a stimulus as well.”
Sales during July/August rose 37% in Australia, 23.3% in New Zealand, Slovenia and Croatia went up 28% and Ireland, 59%. “These were positive figures once the stores re-opened. When the pandemic struck everyone started rushing to the banks thinking everything would be closed and they would need money. Then people found many stores here were not closed. Our stores were closed in every country in the world, except Australia.”
He admitted there were challenges ahead but “we never know what they are, but things are a little more clouded than in the past. A lot of people are making predictions about whether it will be hard or soft landing or whatever, but no one really knows.”
As for the heavy advertising campaign that followed, as turnover went up so did the advertising spend. “We went heavily into print media rather than digital although we did not abandon digital, but went in harder with print. We figured people being at home a lot more would be reading newspapers.”