Gerry Harvey Slams Anchorage Capital Over Dick Smith, As He Expands Overseas
Total Australian franchisee sales for the six months to December were up by 7.7 per cent to $2.72 billion.
According to Gerry Harvey his stores in Asia, New Zealand, Ireland and Northern Ireland are now contributing significant growth.
Total revenues from the Harvey Norman offshore operations, which are all company-?operated stores, rose by 10.7 per cent to $833m.
The earnings picture from the offshore operations is much stronger, up by 128 per cent to $42m with a strong improvement in New Zealand and businesses in Asia and Ireland and Northern Ireland all moving into profit.
The new 9300sqm flagship store in Singapore’s Millennia Walk, is more than double the size of Harvey Norman’s original store on this site.
Gerry Harvey’s wife Katie Page, who has pioneered the international expansion claims that “We are at last seeing some pay-off for their efforts at globalisation”.
Gerry Harvey said that he sees the Australian economy performing better than many others around the world.
At the same time Gerry Harvey took a direct stab at Anchorage Capital Company that floated Dick Smith.
He claimed “world had gone mad” when investors paid up in the $520 million float of the now-defunct Dick Smith business.
Dick Smith’s receiver, Ferrier Hodgson, announced on Thursday that it was closing the electronics retailer’s doors, putting about 3000 staff out of work.
Mr Harvey told Fairfax Media that Dick Smith’s profits evaporated years ago, prompting then-owner Woolworths to sell the business on the cheap to private equity firm Anchorage Capital in 2012.
Harvey Norman executive chairman Gerry Harvey: “It is years since I’ve looked at the figures and got so excited.”
“Then five minutes later this bloke [Anchorage Capital] dresses it up and sells it for $500 million [in 2013], and I’m looking at this and saying ‘I don’t believe this, this business is stuffed’… I’m thinking I wouldn’t buy these shares for 10?, let alone $2,” he said.
“I’m looking at all this and thinking to myself: the world has gone mad.”
The Harvey Norman founder said while some people might claim Anchorage Capital still had a moral, if not a legal, obligation, he didn’t believe the private equity firm cared.
“My opinion is they [Anchorage Capital] will never give back 2? … Now an individual might do that [provide some financial support] – Clive Palmer might even do that – but I doubt private equity will do it,” he said.