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Harvey warns of more failures in store

Date

Colin Kruger

Gerry Harvey... retailers are feeling the pinch.

Gerry Harvey... retailers are feeling the pinch.

HARVEY Norman executive chairman Gerry Harvey says industry conditions remain dire and he expects more retailers will go bust next year after the Christmas sales are over.

''There are more retailers currently under pressure than I've ever seen … I've been in retail 50 years,'' he told reporters after the company's annual meeting on Tuesday.

His prediction comes less than a month after the collapse of discount chain operator Retail Adventures, which announced that 32 stores will close and 650 jobs go by the end of this month.

Mr Harvey warned that despite the wave of failures over the past two years, ''there's plenty more to go because I have them all coming to see me [saying] 'Will you take us over, will you buy a share in the company' etc etc.''

He said many of these businesses were hanging on for the Christmas sales but they know the first half of next year will be ''extremely difficult''.

Many of these companies just needed a little push and they would be gone, he said.

''You've got so many companies out there in that situation.''

He told investors the long-term plan for Harvey Norman - which is the only retailer backed by a

multibillion-dollar property portfolio - was to outlast the competition.

''If anyone is going to be the last man standing it's Harvey Norman,'' Mr Harvey said.

Looking ahead to Christmas, Mr Harvey expected sales to be up on last year if the hot weather holds.

''If we have a really hot period across Australia and we sell a lot of airconditioners, then we'll definitely beat last year,'' he said. ''If it's cold … then we'll battle because airconditioners are a big part of our business in December.''

He defended the amount of financial support the retailer was giving its franchisees to maintain service levels in the lead-up to the crucial Christmas sales.

''Losing staff at this point in time … going into Christmas and going into the new year, is just unacceptable,'' he said.

Harvey Norman chief executive Katie Page, who is Mr Harvey's wife, said: ''We cannot have consumers going into our stores and not getting the best customer service.''

Mr Harvey confirmed that he was a ''passive'' investor in Qantas but would not comment on whether he was part of a high-profile group of investors seeking to challenge the strategic direction of the airline.

''I'm not saying anything for, or against, the Qantas organisation,'' he said. ''The Qantas share price at the moment is about half its asset backing, and if it's half its asset backing I look at that and think, that's a good buy, it could double in price. It's like Harvey Norman, it's 20 per cent below its asset backing. That's a good buy.''

237 comments

  • Hopefully Harvey Norman doesn't sell many air-conditioners then. Apart from people losing their jobs I can think of nothing that Harvey Norman brings to retail other than a bad name:

    1) Poor service in store - often wait forever to be served only to find you know more about the product than the expert who is only interested in selling you a more expensive model.

    2) The WORST online experience I have ever had. There are individual vendors on e-Bay who understand how to sell online better

    3) A complaints system online that does not work and simply sends automated emails saying that they understand that your problem has been resolved when not only has it not been resolved but no-one at Harvey Norman (or Domayne) has contacted you

    4) Advertising of special offers that it would be charitable to describe as mis-leading and then no follow through on the offer. No follow-up on complaints and no real way to complain or get satisfaction.

    Either Harvey Norman starts to properly serve it's customers or property might be all it is left with - can't happen soon enough in my opinion!

    Commenter
    SydneySam
    Location
    Sydney
    Date and time
    November 28, 2012, 8:21AM
    • I don't understand your problem with point "3" - that would seem to be a perfect emulation of the Ebay/ PayPal business model.

      Commenter
      Scott Hillard
      Location
      Newcastle
      Date and time
      November 28, 2012, 9:50AM
    • Had this discussion the other day with spomeone when I said I had bought most of my Christmas shopping through overseas and online stores. The sad part is that some people will lose their jobs. However there are 20 million consumers in Australia with a reasonable disposable income relative to global standards. We do want to buy, we don't want to feel ripped off. So HN and a few others feel the pinch, some will go under because they can't adapt. Then it is up to others to fill the gap with more dynamic stores, stores with customer service that we want to pay for, stores that understand the new global market, stores that are willing to do some work to relieve us of our income not just whinge and complain about us the consumer. It may be a tough few years but i expect that the void will be filled with a better retailer if Gerry and his dinosaurs can't adapt as has happened with every other revoltion in retailing.

      Commenter
      Stephen25
      Date and time
      November 28, 2012, 10:03AM
    • Hardly Normal may be a property business leasing space and an identity to its franchisees but how it can be said to be undervalued on the stock market, when commercial bricks and mortar stores are folding at an unprecedented rate, i suspect only Gerry would know.

      I am assuming a large number of the businesses wanting to be bought out by Gerry are his own franchisees/tenants who will be in serious trouble after the christmas spend fest is over.

      My own experience of shopping at a Harvey Norman franchise is woeful and will not be repeated any time soon.

      Commenter
      whatever
      Location
      sydney
      Date and time
      November 28, 2012, 10:15AM
    • Well well one of Australia's richest men still does not have enough. "Why aren't YOU buying Australian Mr Harvey?" Last time I was in your store I could not find one product you were selling that was made in Australia. Hypocrite!!!

      Commenter
      Paul
      Location
      Darwin
      Date and time
      November 28, 2012, 10:29AM
    • SMH, please give us a Christmas present and stop giving this winging billionaire airspace.

      Commenter
      Sam
      Location
      Sydney
      Date and time
      November 28, 2012, 10:42AM
    • Professional service was worst ever seen in my life of 30 years living in Sydney, Australia.
      Uneducated and useless staff.

      Commenter
      Harry
      Date and time
      November 28, 2012, 10:54AM
    • All Harvey Norman needs to do is go to Mr Abbott, the friend of all businesses and tell him to zip it, stop talking down the economy for his own selfish ends and people will start spending again

      Commenter
      The Fenian
      Location
      Western Sydney
      Date and time
      November 28, 2012, 10:57AM
    • The fenian, Abbott does not have to do anything, your mob are the ones who have got us in debt, with totally out of control spending, that will take us years and years to recover from. Get your facts right. Havey is NOT Abbotts fault.

      Commenter
      annieq
      Location
      Hunter NSW
      Date and time
      November 28, 2012, 11:29AM
    • @The Fenian .....Spot On .......Love It.

      Commenter
      Bazza
      Date and time
      November 28, 2012, 11:34AM

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