By Patrick Avenell

Declining overseas currencies and fierce retail competition have been blamed for a 3.8 per cent drop in global Harvey Norman sales, excluding Singapore.

For the period 1 July 2011 to 30 September 2011, sales in Australia, New Zealand, Slovenia, Ireland and Northern Ireland (UK) totalled $1.48 billion. Unaudited profit before tax for this period is $62.8 million — down 19.3 per cent from the corresponding 2010 figure of $77.7 million.

These sales encompass Harvey Norman’s franchised outlets, commercial divisions and “other sales outlets”.

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In explaining this reduction, Harvey Norman highlighted the “deterioration” of the New Zealand Dollar, the Euro and Pound Sterling compared to the strong Australian Dollar, as well as price erosion and a competitive marketplace.

“The strength of the Australian Dollar, price deflation and intense competition eroded average selling price and, ultimately, retail gross profit margins,” said a spokesperson. “These factors have reduced franchise fees received.”

The closure of seven stores acquired from Clive Peeters was also blamed for this reduction. Offsetting this is the opening of the new Springvale, Victoria homemakers centre (which also includes foot traffic magnet Ikea), new stores in Croatia and Slovenia, and a new Space hub in Singapore.