Go Harvey, Go!
|Type||Public (ASX: HVN)|
|Industry||Retail: Computer, Electrical, Furniture and Bedding goods|
|Founded||Auburn, New South Wales (October 1982)|
|Headquarters||Homebush West, New South Wales, Australia|
|Key people||Gerry Harvey, Chairman/Co-Founder
Ian Norman, Co-Founder
John Slack-Smith, Chief Operating Officer
Katie Page, Managing Director
Chris Mentis, Chief Financial Officer
|Revenue||A$7.76 billion (2011)
Including revenue from franisees
|Operating income||A$417 million (2011)|
|Net income||A$252 million (2011)|
|Employees||Est. 10,000 (Australia Only)
407 (Homebush West Headquarters) (29 September 2006)
Harvey Norman is a large Australian-based retailer of electrical, computer, furniture, entertainment and bedding goods. It is effectively a franchise and the main brand owned by Harvey Norman Holdings Limited. There are more than 230 Harvey Norman stores in Australia, New Zealand, Slovenia, Ireland, Northern Ireland, Malaysia, Croatia and Singapore altogether.
Harvey Norman Holdings Limited is franchisor of several other Australian retail chains such as Domayne, Space Furniture, Ariston Appliances and Joyce Mayne.
Gerry Harvey and Ian Norman opened their first store in 1961, which specialised in electrical goods and appliances. Its success prompted Harvey and Norman to expand the business and conduct talks with retailer Keith Lord, who sought to expand his own retail group. They could not settle on a name for the new business, with Harvey and Lord reluctant to take on the other's name. They eventually decided to retain Norman's name and that of its first store manager, Peter Ross. This spawned the retail chain Norman Ross.
Norman Ross became one of the largest appliance retail chains and by 1979 controlled 42 stores with sales exceeding A$240 million. In the early 1980s, Alan Bond and Grace Bros. sought to acquire the chain, spawning a bidding war that saw Grace Bros incorporate the chain in 1982. Three weeks later however, a determined Alan Bond successfully convinced the Grace Bros. director Michael Grace to sell the chain to Bond. Shortly after, Harvey and Norman were given notice and redundancy package of six months pay. Reasons for their sacking were not publicised, although Harvey later told The Daily Telegraph:
|“||I said I wished Bond would pack up his marbles and go back to Perth. Then I got a telegram telling me I was sacked.||”|
Norman Ross later went into liquidation in 1992. In October 1982, Harvey and Norman purchased a new shopping centre in outer Sydney suburb Auburn for A$3 million, and opened the first Harvey Norman store. The enterprise was intended to be a single store but its success led to the opening of others. Harvey Norman Holdings Limited was listed on the Australian stock market on 3 September 1987.
In the early 1990s, Harvey Norman adopted the superstore format then successful in the United States and entered the computer and furniture markets. The first computer superstore was opened at Bennetts Green, Newcastle in late 1993 with much fanfare. This was later followed by the opening several weeks later with a larger superstore at Auburn (Sydney, NSW). Many stores later expanded their computer sections. Much support was provided by distributors such as Merisel, Dataflow, Tech Pacific, and Marketing Results. Extra support and funding was supplied by vendors (supplied by these distributors) such as Microsoft, Corel, Symantec, WordPerfect, etc. Staff also received weekly training from companies on a constant basis in order to provide better product knowledge (than similar larger retailers). Harvey Norman also sold Apple Computer products for several years, until Apple decided in the late 1990s to no longer supply Harvey Norman. Apple returned in 2004 with the IPod range, which later expanded into Ipads, IPhones, Imacs etc. The launch of Windows 95 was a huge success with a few Sydney stores opening at midnight. This came with a bonus pack. Some regional areas opened at 6 AM. This was also the realisation that the CD was taking over. Demand for the CD version was under-estimated. The bonus back featured Harvard Graphics on CD, as well as an introductory Internet offer from OzEmail.
A Norman Ross store was opened at Bennetts Green in 1995, with the purpose of being a clearance centre. This had mixed results, and was closed within 12 months. This however paved the way for the Bennetts Green store to expand into larger premises in 1996, where the store operates today. Part of the relocation was a dedicated educational centre, named Kidscape. Specialist employees were employed from Dataflow, to provide advice to parents on which software was best for their child. Kidscape was installed at a number of stores; however, it was disbanded at a number of stores, within two years.
A number of stores also opened early for the Windows 98 launch. This included a number of offers (including an SPC CD with Harvard Graphics, Quicken etc.). Other products were promoted at $98, such as modems, printers etc.
Harvey Norman has relied on 'bricks & mortar' as its strength. Hence when suppliers decided to start supplying direct (such as Compaq and IBM), they then stopped selling their products in-store. Compaq had their own stores, which were not successful. Compaq later stopped selling direct, and returned to selling PC products through Harvey Norman.
Harvey Norman growth came organically until it acquired Joyce Mayne in 1998. A number of electrical stores in Western Australia, some of which were owned by Wesfarmers, were purchased. Further acquisitions followed and by 2000 the chain had 100 stores. In 2006, Retravision was struggling, and a number of Retravision stores were acquired by Harvey Norman. These were later converted to either Harvey Norman or Joyce Mayne stores. The stores that were not successful, did not survive and were closed down. 
Harvey Norman's operating structure is unusual in that each store department (bedding, furniture, computer and electrical) is operated by a separate franchisee. Thus many superstores are a combination of three or four separate businesses with each franchisee contributing revenue to Harvey Norman Holdings Ltd (Dernie pty ltd) through lease payments and a portion of sales.
As each section is a separate franchise the salespeople will only work within their franchise, for example, an employee in the computer department will generally not be permitted to assist customers in the furniture, bedding and electrical departments.
Each department also has its own checkout for its products. The warehouse is shared by the separate franchisees.
Harvey Norman Design and Renovations is a subsidiary of Harvey Norman Holdings Limited. The design and renovations arm of the company specialises in bathroom, kitchen, wardrobe, home office, bars and home theatre renovations, and featured showroom franchises in Victoria, South Australia and New South Wales. The Victorian and South Australian outlets have since closed, leaving 5 New South Wales outlets in operation.
In August 2007, market analysts suggested Harvey Norman would launch a rival "big-box" stationery and office supplies competitor to Officeworks before June 2008. Harvey Norman has registered the brand name OFIS and as a result of the acquisition of former Megamart and Retravision stores, has access to well-placed potential sites on which to open Officeworks-sized outlets. In December 2007, Harvey Norman announced it would be opening its first two OFIS stores in Albury and the Sydney suburb of Auburn in March 2008. They aimed to have 100 stores within ten years. In all, five OFIS outlets were established, but proved unprofitable and in February 2009 Harvey Norman stated it would close all of the stores by June 2009 and abandon the concept.
Harvey Norman International
Harvey Norman's stores are in:
Harvey Norman Holdings Ltd previously operated Norman Ross stores in New Zealand. The first store opened on 4 December 2007 in Lower Hutt. All Norman Ross stores were rebranded as Harvey Norman in February 2013.
On 22 December 2011, Harvey Norman launched Harvey Norman Direct Import based in Ireland to ship games to buyers in Australia. The prices for video games are cheaper than the Australia-based online store of Harvey Norman.
Controversies and criticism
- In 1995, the ACCC acted against Harvey Norman for knowingly distributing a catalogue which included more than 20 errors. These included illustrations of sale items with incorrect accessories or functions and packages describing features that it did not, in fact, actually have.
- In 2000, before the Australian implementation of the Goods and Services Tax, the ACCC alleged that Harvey Norman advertised Quicken QuickBooks for $199 with bonus software valued at more than $900 while aware that the quantities of bonus software were insufficient to meet consumer demand. Harvey Norman was also alleged to have misled consumers regarding tax benefits associated with the purchase of Quicken Quickbooks and digital cameras.
- In November 2008, the company's chief executive, Gerry Harvey, was heavily criticised for comparing Ireland's economic problems with the Irish potato famine, an event which saw the deaths of over a million people. Harvey has since refused to apologise, admonishing the Irish for their poor sense of humour and stating: "It doesn’t say much about a people when they can’t take something like that on the chin and get on with it."
- On 8 October 2011, four environmentalist activists illegally climbed the Sydney Opera House and spread out a banner over one of the sails, reading "No Harvey Norman No! Stop selling Aussie forest destruction" as part of a protest against the retailer's profiting from environmental damage. A spokesperson for the protesters said in an interview the "profiting from the destruction of our spectacular forests is absolutely unacceptable". Harvey Norman had previously mentioned they were being "unfairly targeted" and were trying "their best" to sell products from sustainable timber. The protesters were arrested shortly after the event. In response, the Furniture Industry Association of Australia said that, "Get Up! are effectively campaigning for rainforest destruction in other countries instead of sustainably harvested Australian timber". David Penberthy writing in The Punch said, "there have been a lot of dumb campaigns launched over the years but this one is hands down the stupidest thing I have ever seen." The Minister for Manufacturing, Kim Carr has said, "the GetUp! 'No Harvey No' campaign runs the risk of deterring people from buying Australian-made furniture and supporting Australian jobs".
- In December 2011, Harvey Norman was fined $1.25M (AUD) by the Federal Court of Australia for misleading advertising relating to their promotion of 3D Televisions to watch the NRL and AFL Grand Finals in areas which could not receive 3D signals.
- In 2011 the outspoken founder of Harvey Norman, Gerry Harvey fronted a sustained media campaign and funded a special interest lobby group, the Fair Imports Alliance. By late December apparently in a volte-face, Harvey Norman launched a gaming website that leveraged its Irish subsidiary to export video games direct to customers and therefore was outside of the jurisdiction of Australian tax laws for the purposes of GST. Concerns were raised earlier in the year about the prospect of retailers conducting business in such a manner.
Relationship with Flexirent
In addition, Gerry Harvey has himself asserted on primetime Australian television in a January 2008 airing of Today Tonight that Flexirent should be turned down by the average family. This is despite Harvey Norman's indiscriminate promotion of the product onto its entire customer base.
Harvey Norman's major sponsorships include
- The New Zealand Breakers in the National Basketball League.
- The Melbourne Storm, the North Queensland Cowboys and the Cronulla Sharks in the National Rugby League.
- The Richmond Tigers in the Australian Football League.
- National Rugby League State of Origin series.
- "2011 Full Year Results". Retrieved 1 September 2011.
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- "Today in the press". RTÉ News. 27 November 2008.
- McDonald, Gary (2008-11-26). "Tycoon faces Irish backlash over potato famine remarks". The Irish News. Archived from the original on 6 July 2009.
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- "Recession likened to potato famine". 3 December 2008. Archived from the original on 26 May 2011.
- "Harvey Norman chief unapologetic over ‘potato famine’ jibe". Irish Echo. 2 December 2008. Archived from the original on 5 December 2008.
- "ACTIVISTS SCALE SYDNEY OPERA HOUSE". Yahoo7.
- Ferguson, John (9 February 2012), Kim Carr hammers GetUp! ad campaign, AAP, retrieved 12 February 2012
- Penberthy, David (12 February 2012), A campaign without a leg to stand on, The Punch, retrieved 12 February 2012
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- "Offshore tax move could backfire". Fairfax Limited. 7 January 2011. Retrieved 2011-01-07.
- "Flexirent Deals Require a Long Hard Look" (Press release). ACT Office Of Regulatory Services. December 2006. Retrieved 2013-02-07.
- The Micah Law Centre (2007), A Loan In Lease Clothing: Problems identified with instalment based rent/purchase contracts for household goods, Greensborough, Melbourne, Australia
- Pape, Scott (16 February 2008), "Get tough, Wayne (Barefoot Investor editorial)", Herald Sun