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BREAKING NEWS: Harvey Norman Revenues Tank As Online Retailers Strip Market Share

Harvey Norman whose website crashed for over 12 hours on Black Friday, the busiest retail day of the year has reported an 11.9% slide in sales between July and November, and at this stage it’s not known how much the loss of their online site contributed to their downturn in revenues.

Retailers such as JB Hi Fi, The Good Guys and Big W, saw big swings in traffic to their web sites, with tracking technology indicating that a big percentage of the traffic came from people who had initially visited the Harvey Norman site, only to find it down.

ChannelNews understands that JB Hi Fi got over 35% of their revenue from their online operation on Black Friday, that last month attracted over 22,000,000 visitors Vs 5.4 to the Harvey Norman site.

The hit to Harvey Norman revenues was based on comparable sales for its flagship Australian stores for July to November, as shoppers pulled back on discretionary spending.

In a trading update before its annual general meeting management, they reported that the slump between July 1 and November 25 was 11.6 per cent in terms of total sales.

Total sales fell by 7.8 per cent with like-for-like sales down 8.7 per cent.

The retailer said sales had been positively impacted by a 10.8 per cent appreciation in the euro, a 10.6 per cent lift in the value of the British pound and a 2.6 per cent increase in the value of the New Zealand dollar, there was no mention of the online crash which has been described as the “worst Ever” for an Australian retailer.

As for overseas revenues Vs Australia their local revenues fared worse with New Zealand falling 4.1%, Slovenia and Croatia sales were down 4%, Ireland was down 8% and Singapore was down 5.5%.

Chairman Gerry Harvey who loves bagging out online retailers claiming they are “failures” has not said whether they were losing furniture business to the likes of online furniture and homeware retailer Temple & Webster whose shares rose 15% today to $7.46 after they told shareholders that they will exceed $1bn in revenue in the next three to five years.

At one stage he said of Temple & Webster “You look at those online players that were going to take all the business – they are going out of business day by day, across the world,” he said.

Gerry Harvey has also said that predictions that retail juggernaut Amazon would eat into Harvey Norman’s position had been overblown.

Amazon Australia sales rose almost 50 per cent last year.

The online retailer has also doubled its distribution capacity to more than 330,000 square metres, enabling faster delivery, and it launched free one-day delivery for its Prime members in some items in a bid to win over more customers.

It says it has 200 million products available.

Their web site also stayed up during the Black Friday sales unlike the Harvey Norman web site.

The Temple & Webster declaration at their annual general meeting comes after a strong FY23, which saw the company post revenue of $396m and a resurgent past six months for shares in the business.

The company also announced sales from 1 July to 27 November this financial year were up 27 per cent year on year.

Harvey Norman competitors claim that the likes of Temple & Webster are “hurting Harvey Normans furniture revenues”.

Temple & Webster Chief executive Mark Coulter said, “as we return to our growth strategy as a category disrupter, FY24 and FY25 will be focused on accelerating our growth and market share gains”.

“Our strong balance sheet gives us the flexibility to take advantage of what is a once in a generation shift from offline to online, which will rebalance our earnings profile in the near-term, but then get us to our longer-term goal more quickly.”

The words are bad news for Harvey Norman who are described as having an ageing target audience “Whose kids are not shopping at Harvey Norman because it’s seen as an old peoples store” according to one major online competitor.

 



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