Harvey Norman closed its capital raising efforts on Wednesday approximately A$7.8 million short of its A$173.49 million target.
The business sold 66 million shares at A$2.50 a share – roughly half the market price – during the offer period to raise an extra A$165.6 million. Approximately 3 million shares went unsold.
Executive chairman Gerry Harvey told The Sydney Morning Herald the company had prepared for a A$4 million to A$5 million shortfall, leaving the business almost $3 million further out of pocket than expected.
The proceeds of the entitlement offer will go toward consolidating Harvey Norman’s A$626.47 million debt, and better position the company in a currently weak retail market.
However, Harvey recently told Inside Retail that while other retailers complain of a weak retail market, he doesn’t necessarily see it that way.
“I think ‘struggle’, ‘recession’ and ‘tough’ are pretty strong words. It’s not that bad,” Harvey said.
“It’s not great – trying to get to last year’s figures is difficult – but we wouldn’t have made A$574 million [reported profit before tax] if it were so terrible.”
Harvey also noted plans to close up shops with untenable rent increases, while rolling out a premium store format across Australian capital cities to bring excitement back to retail.
“Most retailers right across the world have not been spending money on their shops, and then their shops start to look terrible,” Harvey said.
“I think people are bored with online shopping and shopping centres where they all look the same. They’d like to see something different.”
Harvey Norman’s annual general meeting will be held on 25 November, and may see the business face a board spill if its remuneration report is voted down for the second year in a row.
In 2018, more than half of the business’ shareholders delivered a first strike by voting down its remuneration report, with the Australian Shareholders Association stating the policy didn’t align with its guidelines for good practice.
Harvey hit back at the industry body, calling the ASA “nobodies” which “don’t represent anyone” to The Australian.
“They represent less than 1 per cent of shares in Harvey Norman,” Harvey said.
“They came to the meeting and try to be disruptive, they are trying to make a name for themselves.”