By Patrick Avenell
SYDNEY, NSW: Furniture and bedding are the categories to be in at Harvey Norman right now, with chief financial officer Chris Mentis saying franchisees in this sector were rapidly growing revenue and market share. Electrical and Computers, however, are both suffering, with price erosion again the major contributing factor.
Harvey Norman today reported global sales (excluding Singapore) of $1.4 billion for the nine months to 31 March 2011: a 1.4 per cent increase in total sales but a 3.4 per cent decrease in like-for-like sales.
“Furniture and bedding franchisees continue to grow revenue and market share despite the industry experiencing a slow down with the dampened housing market,” said Mentis, who also claimed that the Harvey Norman and Domayne brands were showing strength and resilience in their market leadership position.
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Electrical franchisees, however, are having it much tougher, with Mentis describing the current retail market as “extremely difficult”. Furthermore, the destructive, price-led battle in TV sector has been blamed.
“Whilst electrical franchisees’ share of the value of the television market remains strong, price deflation has affected revenues in the TV category,” he said.
Improvements in whitegoods, cooking, home appliances and floorcare have offset some of these losses, according to Mentis, who said Harvey Norman has achieved “significant unit revenue”.
In the computers division, strong DSLR, smartphone and gaming sales — plus the expected strength of the nascent tablet category — have been positives. Unfortunately for Harvey Norman, Mentis said this was a “very competitive market driven by a cautious consumer”.
“Significant price deflation, exacerbated by the strong Australian Dollar, was experienced in the key laptop computer category,” said Mentis.