Harvey Norman has announced the closure of five more stores with the shutting down of their OFIS operation which struggled to compete up against the Wesfarmers owned OfficeWorks. This brings to 15 the number of stores that the retailer has said they will close this year due to the economic downturn.
Four of the stores were in NSW and one was in Melbourne. Insiders are also saying that the Companies operations in Ireland are under threat and could be the next to go.
According to the Australian newspaper Chairman Gerry Harvey said that the stores can’t make money, “They will be starting to close down now, and they will be closed before the end of June.” “We wanted to open 100 shops with the concept that we had, but we got to five shops, we looked at it and said this is going to take too long if we ever make it.”
A leading retail analyst said “It was always an ambitious concept up against OfficeWorks. Gerry has kicked himself for many years that he did not move into the stationary and office market years ago. He first saw the idea in the USA with Home Depot but never went ahead with it. Now he is paying the price”.
Harvey Norman said the closure will be a pre-tax profit loss of between $7 million and $8 million in fiscal 2009. Mr Harvey said he did not know how many job losses there would be as some staff could be re-employed.
Earlier this month, the retailer shut its Domayne store in Campbelltown in Sydney and has also announced that they will close 10 more Harvey Norman stores.
