Home > Latest News > Gerry Harvey, Suffers From Verbal Diarrhoea, He Also Claims Amazon Is ‘Not’ A Threat

Gerry Harvey, Suffers From Verbal Diarrhoea, He Also Claims Amazon Is ‘Not’ A Threat

The spat between the Australian Financial Review’s Joe Aston and retailer Gerry Harvey has got nasty after Aston questioned not only the performance of the big retailer but the way in which the accounts are managed and reported.

After being challenged by Aston in the Rear Window section of the AFR, Harvey, who suffers from verbal diarrhoea at the best of times, launched into a tirade of abuse describing Aston as an “idiot”, a “bastard” and “an absolute disgrace”, whose work is “crap”, “lies”, “bullshit”, “so bad” and “nearly 100 per cent incorrect”, and who should be “stripped and flogged” and even “hung”.

Ironically in his 15-minute tirade, Gerry was unable to identify a single error in Aston’s analysis of Harvey Norman’s financial performance.

What he did expose is that Amazon is going to have a field day with the way that Harvey Norman operates.

Joe Aston Australian Financial Review Writer. No fan of Gerry Harvey.

During the tirade, it emerged that Gerry does not see Amazon as a threat.

“We’ll be better than them. They can’t compete with us,” Gerry says with a straight face during an interview with Sky News, droning on for the ten-thousandth time about his presence “in every town in Australia with 10,000 people or more”.

Apparently, Harvey Norman has not worked out yet Amazon are not interested in shipping goods to Dubbo, Cairns or Kalgoorlie.

“I’ve got a shop in Kalgoorlie, I’ve got a shop in Cairns, I’ve got a shop in Dubbo. So, you want an Amazon fridge and they’ve got a warehouse in Melbourne – how are they gonna get it there?” Harvey bleated.

Mate, 15.5 million people live in Australia’s five mainland state capitals and 19 million live in our 20 most populous cities and towns (where the property boom has unlocked record household equity). Dubbo is all yours, son! You can keep the keys to town hall!

Aston responded claiming “How does Gerry get his Remington to Kalgoorlie? By transporter beam? No, he spends more than his whole profit margin on the $899 sticker price just to freight the damn thing. How much of its group earnings does Harvey Norman derive from Kalgoorlie or Dubbo? Absolutely none of it.

‘So, he can keep his country town tumble dryer monopolies. Jeff Bezos doesn’t give two shits about them. Instead, he’ll eat Harvey alive on small kitchen appliances, computers, TVs, stereos, vacuums and cameras – categories worth nearly 60 per cent of Harvey Norman’s turnover’ the AFR said.

The AFR then took a stab at Gerry Harvey’s relationship with consumer electronic vendors.

‘He is lunch buddies with the world’s biggest electronics manufacturers, and he’s sold more LG and Samsung tellies than just about anyone, anywhere. Has he picked up those famous Korean standover tactics along the way? Remember the executive at conglomerate (and Toshiba chipmaker) SK Corporation, Chey Cheol-Won, cousin of its billionaire chairman Chey Tae-Won (who spent two years in a Seoul slammer for embezzlement before being pardoned by his mother-in-law, president Park Geun-hye, now herself in prison)?

He lured a former employee-turned-whistle-blower to a company warehouse back in 2010 and beat him with an aluminium baseball bat as several senior managers stood watching.

In fairness, Harvey has only ever advocated (before me) non-violent sadistic torture, promising more than 15 years ago to buy whichever nursing home then ACCC chairman Allan Fels ended up in.

Aston claims that as a public company leader, Gerry is being asked entirely reasonable and warranted questions by the investment community. His unfounded indignation – belligerence, even – takes us back to Enron’s Jeff Skilling who, asked in 2001 why he couldn’t release a balance sheet or cash flow statement with his earnings reports, thanked the analyst for his question, then called him an arsehole.

He said that Harvey Norman faces a far more pressing danger: the audit of its FY17 accounts, currently with Ernst & Young’s signing partner “Sugar” Renay Robinson, under ASIC’s close supervision. The company’s unaudited accounts specifically state that Harvey Norman does not stand behind its franchisees’ debts. Harvey has since publicly contradicted that position.

Robinson ruling that HVN controls its franchises would trigger a major accounting consolidation and render defunct the byzantine financial structure of Harvey’s empire.

And how can a franchisee who pays $1 for her business, accumulates no goodwill, has her bank account swept daily, has her stock ordered and paid for directly by HVN (yep, the latest bank transfers of Derni Pty Ltd will show Robinson that), can be removed on one day’s notice without compensation and, out of sheer coincidence, has every dollar of her debt owed to HVN forgiven, be in control of that business? There is huge pressure, in the interests of both creditors and shareholders, for EY to insist on consolidation.
With the walls closing in, Harvey must find some latent value to unlock. He’s sitting on a property portfolio self-valued at $2.66 billion (an inventory of which, ludicrously, is not available to shareholders). He can’t establish a standalone REIT because then he’d have to make the franchisees pay the rent. His best option? Spin out the company’s land banks into a JV with third-party money from Asia. Such a transaction would have the added benefit of squeezing the short sellers on his register.

Honestly, good luck to the old billy goat. But if he doesn’t want to take shit from investors, then he should buy them out – and it’s not their fault if his pockets aren’t deep enough (which they most certainly are not).

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