Harvey Goes After Steinhoff Stores, Move Away From CE Tipped
Harvey Norman boss Gerry Harvey who already has a major slice of the bedding and furniture market now wants to have a crack at owning Freedom, Fantastic, POCO, Snooze, Panda Sofas, Bay Leather, Bay Teak and department stores Harris Scarfe and Best & Less.
According to observers the move could see him ditch certain consumer electronic brands that Amazon is now selling in Australia, in favour of large appliances, furniture and bedding which Amazon tend not to sell.
After a shocker of a performance from his Harvey Norman operation who today reported a 19.3% down turn in profits.
Net profit for the six months ending December slumped 19.3 per cent to $207.7 million.
Earnings from Australian franchised stores fell 2.9 per cent to $167.2 million.
Now it’s been revealed that Gerry Harvey is keen to get his hands-on Steinhoff’s Freedom Furniture, Fantastic Furniture and other Australian brands that are set to be put up for sale by the accounting scandal riddled Company.
Run by Michael Ford a former rival to Harvey Norman when he was CEO of The Good Guys, the Steinhoff Asia Pacific operation is currently working with Ferrier Hodgson. The Company is currently under pressure from their bankers ANZ and NAB.
Some say that an acquisition could prove lucrative for Harvey Norman, with Freedom Furniture and to a lesser extent Fantastic Furniture considered two of the major rivals to his company, which also owns the Domayne Furniture brand.
The move could see Harvey Norman move away from selling consumer electronics to concentrate on appliances, furniture and bedding.
His relationship with appliance retailers would allow him to expand appliance sales into what are currently Steinhoff owned stores.
The Australian claims that the future of Steinhoff International’s operations in Australia remain uncertain due to the troubles being experienced by its parent company, which is at the centre of an accounting probe by German regulators.
The investigation into its accounts has seen billions of dollars wiped from its market value, prompting some to wonder whether the Johannesburg and Frankfurt-listed company will be forced to offload some of its prized global retail operations to service its €800 million ($1.23 billion) worth of bonds and other loans elsewhere.
Late last year the bonds were thought to be worth as little as 50c in the dollar.
Here in Australia, Steinhoff lenders ANZ and National Australia Bank have hired McGrath Nicol to protect their interests.
Some believe that the banks will be putting pressure on the Asia-Pacific division of Steinhoff to put assets on the market to ensure it gets back some of the money they are owed as part of a $300m-odd lending syndicate.