Department store Harvey Norman saw a year of record sales in New Zealand of $956.9 million, while profit fell slightly to $77.4 million, due to challenging conditions in the New Zealand market over the 2019 financial year.
The business’ sales rose 1.1 per cent over the period, while profit fell 6 per cent due to margin pressure and higher operating expenses.
“This was particularly noteworthy due to the continuing headwinds faced by the New Zealand economy which is still struggling to gain momentum,” the business said.
“NZ retail spend has been dampened by the prolonged cooling of the housing market, net migration decrease and subdued consumer and business confidence permeating the economy.”
On a group basis, Harvey Norman delivered a NPAT of A$402.3 million – an increase of 7.2 per cent.
The business now plans to further update its Australian and New Zealand sites as they become due, with Harvey Norman’s Mt. Wellington and Hamilton sites to commence refurbishment post-Christmas.
However, the business also has plans to venture further into Southeast Asia, according to executive chairman Gerry Harvey.
“Our immediate focus is on Malaysia, where we think we can open a lot more shops in the next few years,” Harvey told Inside Retail.
“We’re also looking at whether we open in Thailand of Vietnam. That’s not going to happen tomorrow, but we do want to go to other countries.”
According to Harvey, updated stores are the key to remaining relevant in today’s retail climate. This is partially why the business launched its now completed 8-country flagship strategy – to offer a stronger level of customer experience, and bring the ‘wow’ factor back into physical retail.
One such example is the Wairau Park flagship in North Auckland, opened last year.
“You’ve got people going more and more online, and at the same time,wanting to go more and more offline,” Harvey said.
“Most retailers right across the world have not been spending money on their shops, and then their shops start to look terrible.
“I think people are bored with online shopping and shopping centres, where they all look the same. They’d like to see something different.”