By Patrick Avenell
Harvey Norman’s retail woes in Ireland are expected to continue for at least the next three years, according to Macquarie Securities Group consumer analyst Rob Blythe. Harvey Norman yesterday reported a $36 million EBIT loss for its Ireland business during FY2011.
Although this loss was an improvement from the previous financial year ($48.9 EBIT loss for FY2010), the abject state of the Irish economy is expected to continue for the foreseeable future.
“The Irish economy is still in dire circumstances and management note that there still needs to be a drastic improvement in economic conditions before this segment returns to profitability,” said Blythe. “We understand that management in Ireland expect losses to extend for at least the next three years.”
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Harvey Norman operates 14 stores in the Republic of Ireland and two stores in Northern Ireland (UK).
In its report, Harvey Norman expressed optimism for the future, noting that it will be well-placed to maximise sales when the economy improves.
“Our Irish business continues to outperform the Irish market although the economic environment remains very challenging,” the report said. “We continue to be resilient and committed to the Ireland and Northern Ireland markets.”