Gerry Harvey, the man who said the Internet was “A passing fad” and “Would not be around for long” believes he can take on Amazon in Australia, to the extent that he sank $62M into a secret Internet start-up that to date has not delivered a single cent in profits.
Now questions are being asked as to why the Harvey Norman accounts for last financial year included a $11.56 million impairment against the start-up.
Harvey Norman chairman Gerry Harvey said “It’s a venture which we’ve invested a fair bit of money in already but … if we pull this off it will be worth, $200, $300, $400 million,” Mr Harvey said. “And if we don’t, we’ll lose about $50 million.”
According to Fairfax Media, Gerry Harvey said the so called KEH partnership was led by the retailer’s former chief information officer Kaine Escott along with former franchisee Phillip Rohan.
The business is half-owned by Mr Escott and Mr Rohan as well as Harvey Norman Big Buys, the retailer’s online-only, general merchandise platform that sells everything from plastic Star Wars figurines to massage chairs. Big Buys was originally launched as a “deal of the day” website but retail analysts claim it was also Harvey Norman’s attempt to build a “mini Amazon”.
Harvey Norman chairman Gerry Harvey said “It’s a venture which we’ve invested a fair bit of money in already but … if we pull this off it will be worth, $200, $300, $400 million,” Mr Harvey said. “And if we don’t, we’ll lose about $50 million.”
Mr Harvey said the auditors advised Harvey Norman to book an $11.56 million impairment in relation to the start-up, which was advanced more than $25 million last financial year.
