Losses in Ireland 'a real problem' for Harvey Norman
AUSTRALIAN retailer Harvey Norman has seen the performance of its Irish stores rapidly deteriorate since the beginning of the year, with its branches here posting a combined loss of €7.5m in the six months to the end of June.
Gerry Harvey, chairman of what is Australia's largest electrical and furniture retailer, described Ireland as a "real problem" for the group.
Releasing its full-year results yesterday, Harvey Norman said margins at its 13 Irish outlets had come under pressure as it struggled to cope with a marked decline in consumer demand. The company had made a pre-tax profit of €2m in Ireland in the first half of its fiscal year.
The retailer, whose brash advertising has become a feature of Irish television and newspapers, added that higher inflation and a sharp downturn in the property market had resulted in a "very cautious approach to spending among consumers".
The Australian-based company, which entered the Irish market in 2003, said its product margins had narrowed as it sought to maintain and extend market share in "difficult conditions".
Its full-year loss in Ireland, where it employs more than 500 people, amounted to €5.5m. The figures include a provision for depreciation of €3.7m and interest payments of €1.3m.
Revenues for the irish operation over the full-year to the end of June were €131.6m. Harvey Norman said sales at Irish stores climbed by nearly €9m, or 7pc, helped by the first full-year of trading at stores in Naas and Drogheda, and the opening of three new stores at Little Island in Cork, in Castlebar, and at Carrickmines in Dublin.
Outlet
An outlet in Rathfarnham, Dublin, was relocated during the year and converted from an electrical and computers store to a store offering the full range of Harvey Norman products and services.
Harvey Norman said its plan to open two stores in Northern Ireland next year was an "important move" for the group.
Full-year sales for the company worldwide rose almost 8pc to AUS$6.3bn (€3.7bn) -- less than half the percentage growth rate of a year earlier.
The group posted annual overall profit of AUS$295m.
- John Mulligan
