Harvey Norman admits all Irish stores unprofitable as sales dive
Sales at Harvey Norman's Irish stores have slumped by between 20pc and 40pc and all of the outlets are unprofitable, the company admitted yesterday.
However, it added it was not immediately planning to close any of the stores, despite the sharp decline in retail spending and rising unemployment.
Releasing a trading statement yesterday, the Australian company's executive chairman, Gerry Harvey, said that he had never witnessed the type of rapid sales decline the group was currently experiencing in Ireland. He previously described Ireland's economy as a "basket case" and even likened the rate of deterioration in the economy to the famine.
Mr Harvey, who owns 30pc of the listed company, also said he regretted entering the Irish market.
The poor performance of the company's 14 stores here was responsible for the chain missing analyst estimates for its fourth-quarter results.
Despite the poor state of its Irish arm, Harvey Norman recorded a like-for-like sales increase of 1.4pc for the year to the end of June, helped by an economic stimulus package introduced by the Australian government. Total sales were 3.8pc higher year-on-year at A$6.03bn (€3.45bn).
In the quarter to the end of June, like-for-like sales were 2pc higher, while total sales were up 4.5pc at A$1.49bn (€851m). The company said that sales in its Australian outlets were 6.7pc higher during the quarter compared to last year and that like-for-like sales had risen 5pc.
Harvey Norman injected €8m into its Irish business in April in an effort to support the chain. Its Irish stores have been suffering as retail sales continue to fall. In the six months to the end of last December, the Irish arm reported pre-tax losses of A$36.8m (€21m).
- John Mulligan
