Harvey warns more retailers set to go bust
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.''