HomeHarvey Norman AGM: Iconic retailer struggles to match Covid spending surge as...

Harvey Norman AGM: Iconic retailer struggles to match Covid spending surge as sales sag

The retail giant has been unable to match last year’s Covid-fuelled spending surge as the rolling crisis whacks sales.

Furniture and electronics empire Harvey Norman has suffered a sales slump as it struggles to match last year’s Covid-fuelled spending surge.

The retail giant on Wednesday unveiled a near 9 per cent drop in sales so far this financial year compared to the 2020 boom that saw stimulus-boosted shoppers stock up on appliances and office supplies as they were forced to stay home.

The $6.4 billion company – controlled by colourful chairman Gerry Harvey – said rolling lockdowns in NSW and Victoria since June had sapped momentum built up during the first year of the pandemic, when it enjoyed record-breaking profits.

The Domayne and Joyce Mayne owner was among a number of retailers to benefit from a post-Covid renaissance in 2020 as locked-down shoppers unleashed a river of JobKeeper stimulus.

But ahead of its 2021 annual general meeting on Wednesday, the company revealed sales since July 1 had slipped 8.8 per cent compared to the same period a year ago.

Unaudited sales for first quarter of the 2022 financial year – between July and October – were down 35.5 per cent to $217.4 million on a pre-tax basis.

More than 160 of Harvey Norman’s stores across its global network were forced to shut to visitors at some point during that period, although click and collect remained an option for shoppers.

The company has also been forced to confront controversy, including public backlash over its refusal to repay JobKeeper subsidies.

Harvey Norman eventually repaid $6 million of the $22 million it claimed from the Federal Government program, but not before it was dragged over the coals for claiming the payment and pledging to hold onto it even as it significantly boosted profits.

Wednesday’s update sent Harvey Norman shares plunging by as much as 5.6 per cent in early ASX trade on Wednesday as it prepares to face investors for its annual general meeting.

The company also declined to provide investors a clear outlook on account of the uncertainty wrought by the coronavirus pandemic.

Shareholders at Wednesday’s virtual meeting voted to re-elect three Harvey Norman board members – including Mr Harvey’s son Michael – although each of the reappointments received a protest vote of more than 20 per cent.

Shares were last trading 1.4 per cent lower at $5.12.


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