Cautious consumers cause Harvey Norman's sales to dip in Q3
Published 29/10/2010 | 05:00
THE tough retail environment here has resulted in sales at Irish outlets of Australian retailer Harvey Norman dropping 3.9pc year-on-year in the quarter to the end of September.
The performance shows that firms such as Harvey Norman rely heavily on a rise in consumer confidence to allow people to splash out on new furniture and electrical goods.
Sales at the 14 stores in the Republic, which is based on euro-denominated sales rather than a post-translation to Australian dollars, had risen slightly, by 1.4pc to €127.2m in the 12 months to the end of June.
Group sales rose 2.6pc to A$1.54bn (€1.09bn) in the last quarter, but were down 0.6pc on a like-for-like basis.
CEO Harvey Norman Ireland, Blaine Callard said yesterday their furniture business had seen unusual growth, and sales were up 12pc for the quarter on last year.
"Our computer division has also grown, up 6.4pc for the same quarter.The biggest drop in revenues are in our bedding division, which is down 18.5pc and electrical where we were down 11.2pc.
This is not a bad result given severely dampened market conditions," Mr Callard added.
Global sales have been impacted by a 20pc deterioration in the value of the euro versus the Australian dollar, while the value of sterling against the dollar weakened almost 15pc year-on-year.
Sales at the company's two stores in the North were up 6.4pc in sterling terms, while in New Zealand they were 4.6pc higher in local currency terms. In Australia, overall sales were 3.6pc higher but like-for-like sales were unchanged in the quarter.
The company's operation in Slovenia racked up 15.8pc overall growth, with like-for-like sales up 7pc.
Harvey Norman noted that preliminary accounts for the quarter, which are the first of its 2011 financial year, indicate that pre-tax profits dropped nearly 31pc to A$77.7m in the period.