Harvey Norman blames poor results on 'yell-and-sell' policy
Published 14/02/2011 | 05:00
THE head of the loss-making Irish arm of Australian retailer Harvey Norman has conceded that the company marginalised itself here when it entered the market by defining its operations as a "yell-and-sell discounter".
But an upbeat Blaine Callard told the Irish Independent yesterday that, despite the significant losses, the company has racked up in Ireland since it entered the market in 2003, its operation is stabilising, with strong sales of electronics goods over Christmas and increased revenue from its furniture and bedding unit in the second half of 2010.
Mr Callard, who was installed as head of the Irish arm last year, added that he hoped the operation would break even within four or five years, or possibly sooner.
Harvey Norman operates 16 stores in Ireland, two of them in the North. It employs more than 800 people.
"We marginalised ourselves and we just haven't been the right kind of store for many people. We used to only attract the bargain hunters, but that has changed," said Mr Callard.
He added that while Harvey Norman has been perceived in Ireland as a discounter, the company has traditionally been more comparable to UK retailers such as John Lewis.
The Irish Independent also learned that Hilco, the UK retail restructuring specialist firm that owns Habitat, approached Harvey Norman early last year with a view to assisting the struggling business.
The two companies had preliminary discussions that didn't progress any further.
Hilco UK, which is a partnership between UK Management and the US Hilco group, has provided operational and restructuring support to companies such as Woolworths, Littlewoods, Denby and Allied Carpets & Flooring.
"We've had many discussions with many different companies who have been hocking their services to us," said Mr Callard, confirming the Hilco approach.
"It's not an issue of financial restructuring for us though, because we're well capitalised," he explained, adding that the company's operational execution here had not been as strong as it could have been.
The firm has been sprucing up stores and sourcing more of its furniture directly from suppliers rather than middlemen, resulting in lower costs to consumers. Furniture sales comprise about 20pc of Harvey Norman's turnover in Ireland, compared with 40pc in other regions where it has outlets.
In the year to the 12 months ended last June, Harvey Norman made a €26.5m loss in Ireland. That followed a more than €28m loss the previous year.