By Emma Koehn
Harvey Norman chairman Gerry Harvey is optimistic about retail spending into 2023, confident that the electronics and furniture retailer’s regional stores will power on despite fears of a slowdown.
The retailer showed further evidence on Thursday that Aussies are keeping up their spending on discretionary goods, revealing at its annual general meeting that there had been a 6.9 per cent jump in sales during the first four months of the 2023 financial year.
The company has also flagged a major expansion into the Malaysian market, with plans to grow there from 28 to 80 stores by 2028.
Harvey told this masthead that Malaysia’s population was bigger than Australia and its citizens were becoming increasingly affluent, meaning there was a big opportunity for the country to contribute significantly to Harvey Norman’s business in years to come.
“If you can get established in a country and be a number one retailer in that country in the products that we carry... then when that does happen, Malaysia in 10 or 20 years might be just as important as Australia,” the retail billionaire said.
Harvey said sales in the lead-up to the Black Friday special deals weekend and Christmas trading had been strong across the business.
‘Everyone is out there advertising their head off [ahead of Black Friday]. The sales are very strong in our stores, and I expect they’re the same everywhere else.’Gerry Harvey
“Everyone is out there advertising their head off [ahead of Black Friday]. The sales are very strong in our stores, and I expect they’re the same everywhere else,” he said.
While consumers could ease their spending in the new year, the impact might not be as strong as feared as regional town centres power on with strong employment and agricultural activity, he said.
“We are looking at it a bit optimistically because we have 65 percent of our stores in regional and country areas. Our country stores should be quite strong all next year.”
Investors didn’t seem to share his optimism, with Harvey Norman’s shares closed down 1.4 per cent to $4.17.
Meanwhile, rival furniture retailer Nick Scali also had good news to report, telling shareholders at its annual general meeting sales for the financial year to date were 74 per cent stronger than during the same time last year.
Shares in the company jumped 10.7 per cent trade at $10.34 in early afternoon.
E-commerce retailer Kogan was up 9 per cent at $3.74, with the stock advancing even though CEO Ruslan Kogan said at its annual general meeting that sales for the first four months of the financial year had dropped by 38.2 per cent during a period of “subdued sales activity in ecommerce”.
Despite this, he said the business would be able to return to its growth trajectory after it completed its sell-through of excessive inventory that it has been working through since it overestimated customer demand after COVID restrictions lifted earlier this year.
“We look to the second half of [the financial year] with confidence as the Kogan Group returns to being an agile, inventory-light business with strong operating margins,” he said.
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