Furniture and electronics retailer Harvey Norman saw a massive spike in sales over the past year that spills over into 2021 as the retailer posts record profits.
« I’ve been in retail since the late 1950s and I’ve never seen anything like it, » the retailer’s chairman and co-founder Gerry Harvey told news.com.au.
Harvey Norman’s earnings more than doubled in the first half of the year, with huge sales peaks lasting through January and February.
The global retailer’s total sales rose more than 20 percent at the beginning of 2021. In Australia alone, total sales rose more than 22 percent in the first two months of the year.
« We have seen ups and downs and recessions, but retail in Australia has never seen this, » he said.
Harvey Norman saw half-year earnings jump 116 percent to $ 462 million as sales at its stores rose more than 25 percent to $ 5.12 billion. The retailer posted pre-tax income of $ 644 million, up 114 percent from $ 301 million last year.
« The big increase is because people have been spending on their homes and not going out. It’s happening all over the world, » he said.
« It didn’t stop. April, May and June sales went through the roof and it didn’t stop in January and February. »
The retailer was one of the big winners from the pandemic as customers spiced up their homes and offices while they were at home.
« People are spending a lot more time in their house now, looking at their house and garden instead of going to the restaurant or booking the next vacation to be assigned to their house, » said Harvey.
He added that it wasn’t just Harvey Norman who posted these profits, as other furniture and electrical goods retailers – « everyone who sells our kind of products around the world » – benefited as well.
« This was an extraordinary time for the type of retail we do, » said Harvey.
However, he noted that it had been a very difficult time for other industries, including hospitality and travel.
He added that Harvey Norman took the opportunity to gain market share when he saw the opportunity and opened a number of stores to meet the surge in demand.
The retailer opened a number of new warehouses that could store all of the stocks customers bought. « We have opened another 60 warehouses across Australia, » he announced.
“There has been a lot of stock shortages over the past six to eight months, so we’re buying everything we can get our hands on so we have the stock,” he said.
In Australia, Harvey Norman’s sales rose 27 percent in the first half and New Zealand increased 18 percent.
Sales in Slovenia and Croatia also rose nearly 14 percent, while Ireland grew massively by 54.5 percent and Northern Ireland by 21 percent. Singapore grew by almost 2 percent and Malaysia by 7 percent.
« It was like this in every country, not just Australia, » he added. « Sales went through the roof. »
Mr Harvey added that while the retailer’s online sales increased during the pandemic, pedestrian traffic in the showrooms increased as people were allowed out.
« The moment we opened the showrooms, online sales dropped dramatically and sales went off the roof, » he said.
« I am nowhere near convinced that it will be everything [online] that people think is going to be, » he added.
« With furniture, bedding and electrics, the greater percentage of people want to come to the store rather than buy online, » he said.
Shareholders also receive a large payout due to Harvey Norman’s success, with dividends doubling due to the surge in profits.
The half-yearly dividend gives shareholders 20 cents per share, up from 12 cents in the previous year, which was later canceled due to the looming COVID-19 health crisis.
Harvey Norman had a net cash position of $ 21.75 million at the end of December 2020, compared to net debt of $ 553.23 million at the end of 2019.
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