EXCLUSIVE: Harvey Norman, who back in 2001 dumped Australia’s then number one PC Company Compaq after discovering that they were set to open nine retail stores, is today set to hold discussions with Sony about the expansion of their Sony Central stores in Australia.
It is expected that Sony will be told that if they expand to 19 stores or “more than what they have now they will be dumped from Harvey Norman stores”.
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David Ackery, a director at Harvey Norman said last night that he was set to discuss the issue with Sony and that the expansion of Sony Central stores was “not good and not wanted by the mass retailer”
“Before I comment in detail and want to discuss the issue with Sony” he said.
Back in 2001 after I exclusively revealed that Compaq was set to open retail stores in NSW and Victoria, Gerry Harvey the CEO of Harvey Norman, took exactly the same approach over a similar issue.
Within an hour and after a discussion with Ian Penman the then CEO of Compaq, Gerry Harvey came back to me with the news that he was “kicking” Compaq out of their stores.
He said at the time “I have today held a discussion with Mr Penman and he has confirmed that he is set open retail stores in Australia. As a result I have instructed him that we are removing Compaq stock from our shelves and that he can collect the stock from our loading docks”.
Compaq stayed out of Harvey Norman stores for more than two years.
Yesterday ChannelNews exclusively revealed that 19 separate Sony Central business names have been registered at the Australian Securities Commission with insiders at Sony telling ChannelNews that Sony intends to expand their Sony Central stores in partnership with selected retailers such as Video Pro in Queensland and Bing Lee in NSW.
Four Harvey Norman franchisees contacted by ChannelNews yesterday in NSW and Queensland said that they were concerned about the expansion of Sony Central stores as they have the potential to take “significant business away from Harvey Norman”.
“What Harvey Norman management have to do is stop the spread of these stores now before they become a major chain. Right now two or three stores are not a threat but 19 are and I suspect that Gerry will tell them that if they continue to develop 19 stores that we will no longer sell Sony products. This will hurt Sony more than Harvey Norman as there are ample products to fill the Sony void. While they are a big brand, they are losing their lustre and it is just as easy to sell a Samsung, LG or Panasonic product in place of a Sony product”. said a NSW Harvey Norman franchise.
“It appears that Sony is being greedy. I think the whole issue is about profitability and Sony wanting a bigger slice of the take. 19 stores is a big retail chain for one brand and we have been told that as part of the recent restructuring at Sony, sales and marketing staff are now focusing on helping grow the Sony Central stores. This effort should be going into helping Harvey Norman and JB Hi Fi to sell more products “Said a senior manager at a leading Harvey Norman store in Queensland.
Phil Moujares, the General Manager at Bing Lee, refused to discuss the Sony Central stores but he did admit that he is currently in discussions with Sony about the opening of an additional store. He also confirmed that the new Sony Central store being opened in Drummoyne NSW was set to be run by Bing Lee and that it will open in June.
The store is located on Victoria Road in a building purchased by the late Ken Lee in 2007.
The CEO of leading CE retailer JB Hi-Fi, Richard Uechtritz, claims that as Sony’s biggest customer, he is not happy with the spread of Sony Central Stores into new suburbs such as Drummoyne in NSW and Robina on the Gold Coast.
