By Claire Reilly
Harvey Norman has released its financial results for the second half of 2011, posting a decline in total sales across the company of 6.1 per cent, and a decline in total Australian sales of 6.8 per cent (6.6 per cent like-for-like sales), when compared to the same period in the previous year.
While Australian sales fell by 2.9 per cent in the first quarter of the 2011-2012 financial year (July-September 2011), second quarter sales plummeted by 10.2 per cent, indicating that the traditional pre-Christmas spending period brought little relief to the retailer.
Explaining the results was Harvey Norman’s chief financial officer, Chris Mentis.
“The Australian sales data for the second quarter FY12 has been negatively impacted by the closure of the 7 Clive Peeters and Rick Hart stores, coupled with the transition of rebranding the remaining 18 stores to Harvey Norman and Joyce Mayne franchised complexes,” said Mentis.
“Australian franchisee sales data for the first half year ended December 2011 indicated that despite the decrease in sales turnover there was strong growth in units sold across all key categories."
Mentis also outlined the varying successes of different parts of the Harvey Norman business, noting that its furniture and bedding categories continued to perform despite a soft housing market, and that the retailer's electrical categories were facing challenges.
“Transactions in the Audio Visual and Information Technology (AV/IT) categories increased over the same period last year, however, ongoing price deflation, particularly in the flat panel television and computer hardware categories, has resulted in lower sales dollars.
“This deflation has been well publicised and highlighted by the placing into administration this week of WOW Sight and Sound and the announcement of the restructure of the Dick Smith brand. On the back of the home renovation market our home appliance business remains positive.”
Globally, the New Zealand branch of the company saw a 10.6 per cent decline in first quarter sales, followed by a 2.3 per cent uptick in the second quarter. Northern Ireland saw a 3.8 per cent dip in total and like-for-like sales for the half year, while sales in Ireland climbed by 5.8 per cent over the same period.
Interestingly, Harvey Norman’s businesses in Slovenia and Croatia saw a 15.1 per cent increase in total sales for the six months, but a 14.9 per cent decrease in like for like sales. During the period, the company opened its first store in Croatia, and opened one new store in Slovenia (bringing the country total to five).
This article first appeared on Current.com.au