Retail Armageddon : Gerry Harvey is predicting a mass death of retailers in Oz in 2013.
The boisterous billionaire also predicts his outfit will be “the last man standing” as other retailers go under in 2013, Chairman Harvey said, speaking after Harvey Norman AGM yesterday.
“You’ve seen more retailers go out of business in the last two years than you have seen in the history of Australia and there are more retailers currently under pressure,” Gerry Harvey said.
“After Christmas you will see a lot more go.”
And as others fall, Harvey predicts his approx 214 electronics franchisees will be well positioned to get “the advantage” of those going out of business.
“We’re doing all things possible to be there when another 20 per cent of the stores close in the area that we’re in.”
“We’re in a very difficult environment and we’re playing `last man standing’,” he said.
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But let’s not forget it hasn’t been all roses for Harvey either, who recently reported a profit slump of 20% to $50.1 million, local sales falling 11.5% and 10% globally, with share price also taking a tumble.
The trading slump was blamed on “the cautious consumer and continued price deflation,” although the retailer has been hit by criticism of senior management and poor customer service.
But Harvey told media yesterday he was convinced his company would survive as suppliers had told him “he was in better shape than his competitors.”
He also said his retail empire would have the financial resources to help troubled franchisees out, if necessary. Harvey Norman currently has a $4bn asset base including $2.12 bn property portfolio.
“It is going to happen. I can guarantee you. It’s only getting worse.”
Of the prickly issue of customer service, which several shareholders raised at the AGM, Harvey said that customers now had a heightened sense of entitlement when they came into his stores.