Harvey Norman Looking To Expand Into The UK, As Gerry Praises Tony Abbott
In an interview with the UK Financial Times Harvey said that he will move into the UK market with Harvey Norman branded stores, when the Irish operation is profitable and conditions are right.
When asked about the political landscape in Australia he described former Labor Prime Ministers Kevin Rudd and Julia Gillard as “idiots while praising Prime Minister Tony Abbott as a “good bloke” but admits the public simply does not like him.
“The political system is broke,” he says. “It doesn’t matter who the leader is if you are frozen in time and your hands are tied. Social media is so strong that minority groups get a huge say,” he says.
He gives warning that Australia’s inability to pass reforms leaves its economy vulnerable.
“It’s crazy, Australia is in a situation where it is one of the most expensive countries in the world to do business and the resources boom is over,” he says.
“The one thing we know for sure is we are entering a period of uncertainty in the world that is unprecedented.”
On the question of online retailer Harvey said that the Harvey Norman online web site accounts for about 3 per cent of electrical and computer sales, he also bragged that “his” web site does a better job than any other retailer in Australia.
“Even now the internet is hyped,” said Harvey, who likens the zealotry of some online advocates to religious cults. “If you are a manufacturer an internet company doesn’t suit you. An internet company does not display your product, it can’t upsell. But we do a better job than any of the opposition.”
Harvey even admitted that he often shoots from the mouth.
He said “I’ve got into trouble before with journalists for being candid,” he says.
After four decades of expansion, which saw Harvey Norman grow into one of Australia’s few multinational successes, the business hit trouble in 2012 due to heavy losses in their Irish operation.
At the time Harvey Norman’s market value plummeted from a$7bn in 2007 to below a$2bn by early 2012.
At the time one rival branded Mr Harvey a “whingeing dinosaur” for failing to master internet retailing. Some commentators called on him to follow the advice of his company’s catchy “Go, Harvey” advertising jingle and leave more than a half century of retailing behind.
He said “There were people saying Harvey Norman had had its day, it was yesterday’s retailer. We’d certainly been given a kick in the arse,” says Mr Harvey, who owns almost a third of the business.
“Most businesses which face a dip like that go broke. The Ireland problem is disappearing, New Zealand is very strong and we expect Asia to improve: we are regaining our mojo,” he adds.
On the question of how long he will stay at the helm of Harvey Norman he told the Financial Times “I was talking to Rupert Murdoch the other day at a lunch and he said ‘maybe I’ll live to 100’. He actually thinks he will live to 100!” says Mr Harvey, who is an admirer of the News Corp executive chairman’s passion for managing his business in good times and bad.
“I enjoy what I do,” he says from behind a desk piled high with spreadsheets, research reports and sales figures. “If I have to go because I’m mentally or physically f****d then maybe I’ve got to go, but I’m not going willingly, I’m going screaming,” he says.
Farina Parsons, an analyst at Morningstar, is critical of Mr Harvey’s record. “The last 18 months have been good for Harvey Norman with a housing boom in Australia helping Gerry Harvey to turn round the business. But I have a feeling this is masking underlying issues with the company,” she argues.
“He hasn’t embraced the online strategy as well as he could have. The online business is pretty poor,” she says. “Gerry and his wife Katie own 30 per cent of the equity?.?.?.?raising questions around whether it should be a listed company. It is run like a private company and it would be good to see a larger cross section of industry experience on the board.”