Retailer in heaven
Harvey Norman profit up 186pc
HARVEY Norman sales surged an unprecedented 30 per cent for the 11 weeks to mid-september, as Australian consumers splashed out on products for their homes instead of travel.
“I have been doing this since 1959 and I have never in my lifetime seen anything like this,” said the retailer’s chairman Gerry Harvey.
The electrical goods and furniture retailer notched up a 30.6 per cent increase in aggregated sales between July 1, 2020, and September 17, 2020, compared to the prior year, even with 18 Melbourne stores closed for much of that period. The preliminary pretax profit for the period from July 1 to August 31 jumped 186 per cent to $178.1m compared to $62.3m for the prior corresponding period.
Mr Harvey said shoppers were behaving the same way globally, with Ireland the company’s best performing market, with sales for the period up almost 62 per cent.
“Right across the world — if you are in this space of retail where you are selling homemaker products you are in a boom time — an unprecedented, never-to-be-seen-again boom time,” he said.
Harvey Norman shares rallied 2.1 per cent to $4.44 on Monday and are up 9 per cent since January.
Mr Harvey said print newspaper advertising had helped drive sales higher. “Harvey Norman has put a huge amount of our (marketing) budget into print advertising and all of a sudden (our) sales went through the roof — and all the other (retailers) out there decided they would also look at print,” he said.
He said at the start of the COVID-19 pandemic, consumers were splashing out on new computers and freezers.
“Then it went to white goods, then it went to TVS and then to furniture and bedding and now it is right across the board, every department,” he said. “If you are in this particular segment of retail it is hot — it’s red hot.”
On the border closure front Mr Harvey foreshadows that state governments will be in for strident criticism through the ongoing border closures when there are virtually no COVID-19 cases.
“You might get away with it for a while, (but) the public will rebel,” he said adding that the state border closures decisions are entirely political.