Tuesday, April 17, 2012

Harvey Norman reports Irish loss of €23m - The Irish Times - Sat, Apr 14, 2012


HARVEY NORMAN, which operates 14 outlets in the Republic and a further two in the North, has reported a pretax loss of more than €23 million for the 12-month period ending June 30th, 2011.

The furniture and electronics retailer incurred a €31 million loss in its Irish operations in 2010, and sales on the island fell by 1 per cent, or €1.17 million, last year, it says.

Gross profit margin at the company, which employs 776 people on the island, was up 1 per cent, or €380,000, year-on-year in what the company described as “an extremely competitive retail market”.

A cost-reduction programme brought expenses down by €2.4 million. The company also notes that the number of transactions in its shops increased in the year, and that its market share “in key categories” has also increased.

In documents filed with the Companies Registration Office, the Australian-owned retailer cited stagnation in the Irish property market and the withdrawal of financial support by parent company Harvey Norman Holdings as ongoing risks to its business here.

In their report directors of Harvey Norman (Ireland) Ltd blamed continuing Government austerity measures which have resulted in “structural weakness in the domestic economy, in the retail sector in particular.”

The directors were also critical of “the Government’s recent reversal of its election promise to legislate against upward-only rent reviews”.

They say retail rents across the sector are “badly distorted and do not reflect market reality”.

The company says it hopes to tackle its problems by controlling costs, keeping tighter controls of inventory and optimising margin from its income streams.

Established by Australian magnate Gerry Harvey in New South Wales, Harvey Norman operates 320 stores worldwide.

Mr Harvey was heavily criticised in November 2008 after calling the recession-hit Republic a “basket case”, and likening the savage market slump here to the “return of the potato famine”.

The Harvey Norman Group last year reported worldwide sales of €4.45 billion for the 12 months ending June 30th, 2011. This marked a 1.7 per cent rise on the same period a year earlier.

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