AUSTRALIAN ELECTRICAL and furniture retailer Harvey Norman has said it will continue to support its struggling Irish operation through the recession.
Sales in the business, which incurred a net loss of €41.1 million in the year to June, have taken a big hit as consumers curtail discretionary expenditure.
The company revealed last month that each of its 16 Irish stores was losing money, with sales plunging by as much as 40 per cent. However, Aidan Brady, general manager of finance and administration at Harvey Norman Ireland, said yesterday the company was “committed to Ireland for the long-term”.
His remarks echo those of Harvey Norman executive chairman Gerry Harvey, who pointed to exceptionally difficult trading conditions here as the company reported a 40 per cent decline to 214.4 million Australian dollars (€125.74 million) in annual net profits in its overall operation.
“We are having a dreadful time in Ireland but we are committed to staying there and trying to get through,” Mr Harvey said on Bloomberg television yesterday.
At the company’s annual meeting last November, he described the performance of the Irish business as “catastrophic”, and said he regretted expanding into the Irish market.
Well-known for its brash advertisements, Harvey Norman Ireland employs more than 800 staff at 14 stores in the Republic and two in the North. Turnover in Ireland fell by €11.04 million to €125.26 million, reflecting challenging retail conditions generally and declining consumer confidence. This net loss reflected an asset impairment expense of €14.8 million, which was recorded in respect of plant and equipment assets. Also included were €4.1 million in start-up and first-year trading losses following the company’s expansion into the North, where it has stores in Newtownabbey and Holywood.
“Harvey Norman Ireland is well placed to grow our core business as we continue to establish strong roots in the Irish marketplace. We are continuing to invest in our brand and our staff to ensure that we continue to offer the consumer excellent value,” Mr Brady said.
He said the company would continue to reduce costs, focusing on key areas such as property costs.
Shares in the company on the Australian markets rose 17 per cent yesterday on foot of its annual results, which surpassed analysts’ expectations. The profit from underlying operations was $250.42 million. Although this was down 15.2 per cent, it represents big turnaround from the first-half result which was down 29.1 per cent.
