Is Harvey Norman Buying Up Coronavirus Stock After Shares Slump 14%?
As the Coronavirus worsens in Australia some retailers have taken to buying up stock at distributors while negotiating access to stock from major brands. According to Harvey Norman chairman Gerry Harvey he claims to have enough stock of goods to last untill at least the end of April.
On Friday Harvey Norman Group was the worst performing stock on the ASX slumping 14% after the big retailer reported a 4.1 per cent drop in its interim net profit to $213.59m and a 44% slump in the value of his property portfolio.
while sales revenue rose 1.9 per cent to $4.07 billion, same-store sales growth for the December half was 1.6 per cent with franchisee reporting a 3.2% fall in sales.
When asked about his sales performance Gerry Harvey told News Corp “It might get a lot worse the way thing are going. These are one of these times when it (the market) gets a bloody hiding,’’he said.
On the question of stock and supply he claimed that Harvey Norman stores was not facing any issues sourcing product out of China, with shipments through to March and April looking on track.
CHannelNews understands that several brands have been approached by Harvey Norman to buy “all stock” available in Australia and any stock that may be in transit.
Gerry Harvey said that the coronavirus and a generally flat economic marketplace were making it harder for Harvey Norman to lift its earnings on last year.
“I’ve spent every day for the last two weeks ringing stores and talking to our people, trying to figure if anything is happening and what do they think is going to happen,” he said.
“It’s pretty much business as usual at the moment and I’m not getting any feedback from any of them saying ‘oh shit, I’m scared’. But we have been saying all year we are battling to get last year’s figures in a greater majority of shops. Some are doing quite a bit better and some are doing quite a bit worse, but overall trying to get last year’s figures is a battle.
Despite a fall in revenue at overseas stores such as Singapore where sales fell 11.5% he said that “pretty happy” with their overseas operation.
The Company announced that they have opened 5 shops in Malaysia during the past quarter.
“I’m pretty happy with how we are going overseas. I’m not quite as a happy with the result we have got here. I would have liked that to be at least marginally better, so just 1 or 2 per cent better would have been OK.’’