Business Irish

Friday 29 August 2014

Mixed fortunes for Harvey Norman as group revamps and goes online

Peter Flanagan

Published 11/07/2012 | 05:00

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UP to 85 jobs are at risk at Harvey Norman stores in Ireland after the company announced a reorganisation that will see one store close, a number of others reconfigured and the setting up of an online shopping service.

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The Australian retailer, which has long struggled in Ireland since establishing itself here at the height of the boom, said it would close its store in Mullingar, Co Westmeath, and reconfigure its Dundalk, Co Louth, outlet and two retailers in the North to concentrate on selling bedding and furniture.

The closure of the Mullingar store and other changes "may affect" 45 jobs in the Republic, while another 40 jobs are at risk in the North.

Consultations have begun and the company is promising a "generously enhanced ex gratia package".

The company is also believed to be consolidating administrative roles in its Cork business, putting five positions at risk.

In what was a rare ray of hope for Harvey Norman staff yesterday, the group did confirm plans to open a store in Blanchardstown, creating 18 jobs, while there are another 14 slots available in the organisation at the moment.

The company is also planning to open an online shopping portal in the autumn, creating four jobs.

Statement

In a statement yesterday, the company said the Mullingar store at Lakepoint Retail Park had underperformed and "is no longer viable for several reasons including high rents, prolonged vacancies in the retail park, and migration of shopping back to Dublin, all of which has had a negative domino effect on footfall and customer numbers".

"The moves are designed to reflect a 'Fit For Purpose' philosophy at all of the Harvey Norman stores in the Republic and further grow their market share," the company added.

Despite the changes, the company remains committed to Ireland, a mantra that it has had to repeat a number of times since the downturn took hold.

In 2010 Harvey Norman recorded an operating loss for the island of Ireland of AUS$51.1m (€42.6m), and a further AUS$38.6m in 2011.

Yesterday chief executive of the Irish business Blaine Callard said overall revenue in Ireland is growing, while the move into online sales was part of giving customers multiple options to buy.

"This is about giving our customers convenience and choice about how they buy from us, it is all part of our omni channel strategy. While the closure of any store is naturally regrettable, it was simply not economic for the Mullingar outlet to continue in operation.

"The company could no longer ignore the simple facts that the store in question was not trading at a level that justified continuing investment," he added.

Irish Independent

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