Harvey dismisses threat of Amazon

HARVEY Norman chairman Gerry Harvey says the effect Amazon will have on his business has been overblown and most analysis had been given by people who had no experience in retail.

The retailer delivered the withering assessment after his company posted a 29 per cent jump in net profit to a record $448.98 million for the year to June. The furniture, whitegoods and electronics heavyweight is also aiming to double profit from its international arm to $200 million over the next three to five years.

A record profit did not stop shares in Harvey Norman sliding more than 7 per cent yesterday after the group cut its dividend and analysts pointed to a slowdown in sales growth across the year.

“I think a lot of this is about perceptions — perceptions about the housing market, wage inflation, Amazon, all of these things,” Mr Harvey said.

“People are looking for reasons why you might fail. But if they look at the long-term Harvey Norman story, it is one of the greatest retail stories in Australian history.”

Retail stocks have become among the most shorted on the Australian bourse as investors fret about the impact of Ama- zon, a slowdown in the housing boom and stagnant wage growth. But Mr Harvey said economic conditions remained “reasonable” and predictions Amazon would grab upwards of 15 per cent of the group’s sales were “utter rubbish”.

“Amazon has been talked about mostly by people who have no idea what they are talking about,” he said.

“People talk about Amazon coming — Amazon has about 3 per cent of the fridge and washing machine market in America and if it gets to 3 per cent here, what difference does it make to us? We have a very big market share and that doesn’t look like changing.”

Sales across all Harvey Norman, Domayne and Joyce Mayne stores rose 5.1 per cent over the year to $7.27 billion.

Its shares closed 7.5 per cent lower at $4.08.