Losses narrow by over 80pc at Irish arm of Harvey Norman
Harvey Norman, the Australian homewares and electronics chain, narrowed the loss on its Irish operations by 83pc last year as it notched up a sixth consecutive year of sales growth led by stronger growth in its furniture, bedding and interiors categories.
The Sydney-based giant posted another operating loss of €208,637 for the year ending June 30 2017, representing a hefty turnaround on the previous period when the group sank €1.26m into the red.
Accounts just filed for Harvey Norman, which is chaired by one of Australia’s best-known retailers, Gerry Harvey, state the directors are “confident” the group “will return to overall profitability in the near term.”
Total sales increased last year by 0.9pc to €1.67m and the financial statements highlight the expansion of the store network in Ireland remain “one of the cornerstones of the company strategy”. In July Harvey Norman opened a 60,000 sq ft store at Airton Retail Park in Tallaght, the chain’s fifth store in Dublin.
Overall the retailer operates 13 outlets in the Republic and 2 in Northern Ireland.
Despite the sharp improvements in sales and market, Harvey Norman’s Irish arm continues to weigh on the balance sheet of its Sydney based parent with the shareholder deficit widening slightly last year to €102.7m versus €102.6m in 2016.
The accounts stress the Irish unit’s growth in sales - turnover leapt almost €4m higher to €182.5m - “has not come through discounting or at the expense of margins” but from the “resilient and continued growth within the furniture, bedding and interiors categories”.
According to the documents this turnaround “has been driven by a further shift from distribution to direct imports, increased representation of Irish-made product, and renewed investment in showrooms and marketing.”
These improvements helped "offset a currency-led softening in the technologies and appliances categories" along the "uncertainty and instability" weighing on consumer confidence as a result of Brexit.
Despite the difficulties Harvey Norman has faced since forging into Ireland in the pre-crisis era, the accounts note the chain “is a significant and dominant multichannel retailer within the local market”.
Rental costs, long a burden for the Irish unit fell last year to €11.89m in 2017 compared with €13.5m in 2016. Staff costs however rose as Harvey Norman increased its headcount by 21 to 881 in 2017 with total remuneration for the group rising to €29.2m last year compared to €28.1m in 2016.