Harvey Norman has revealed plans to purchase several Retravision stores in a move which would eliminate a sizable chunk of its competition.
Not even a year after reporting a $41.07 million loss from its purchase of Clive Peeters and Rick Hart, the retailer will take over Retravision and Betta Electrical stores in Gunnedah, New South Wales, as well another six unnamed locations.
The Southern arm of the Retravision group went into administration in May this year. Retravision Southern owns 104 stores in Victoria, southern New South Wales and Tasmania. The stores are currently still in operation.
The administration does not affect Retravision’s Western and Northern arms, the latter of which includes the Gunnedah store.
The plan, first reported by the Financial Review, will see Harvey Norman introduce new retail categories including cookware and appliances.
CEO Gerry Harvey told CRN Harvey Norman first approached the Gunnedah stores with a potential takeover last year. He said Harvey Norman is currently studying a number of opportunities in country towns across Victoria and New South Wales, with a variety of retailers.
Harvey Norman’s latest acquisition plan resembles its takeover of Clive Peeters and Rick Hart. The Clive Peeters group was on the brink of administration when Harvey Norman forked out $55 million for the 29 stores in July 2010.
Harvey Norman management came to regret its decision, last August announcing its intention to shut down seven Clive Peeters and Rick Hart stores and rebrand 16 more into Harvey Norman branches.
"The Clive Peeters and Rick Hart brand formats have not achieved the requirement for ongoing investment by the company," the company noted at its August briefing last year.
In November last year, Harvey Norman appointed an administrator for three of the failing subsidiary stores in Bendigo, Victoria, and Mandurah and O’Connor, Western Australia.
Harvey denied similarities between the Retravision and Clive Peeters deals, admitting the Clive Peeters/ Rick Hart takeover was a “100 percent disaster”.
“This is different. We’ve taken over a lot of retailers over the years, and mostly they all work out pretty good,” he said.
“Looking back, I should be flogged. If someone who worked for me did that I’d sack them.”
“I’ve been doing this for 50 years and I just never learn. I keep making mistakes, my only salvation is that I’ve made some good decisions that have allowed me to make those mistakes.”
A jam-packed year
Harvey Norman has spent the past year battling through falling retail sales, a changing marketplace, a new online strategy, store closures and even fires, but is continuing to invest in major projects.
One of those projects includes the 32,600 sqm Maroochydore homemaker centre, set to open in October this year. The mega-centre will consist of Joyce Mayne, Domayne, Harvey Norman and other non-related retail outlets.
The retailer is also mulling new store opportunities all around Australia, including Canberra and Sydney.
Harvey Norman’s Ben Macintosh told CRN in February the retailer may open new stores this year.
Harvey Norman reported a 9 percent increase in net profit to $252 million for its full year to June 2011, compared to an 8 percent rise for the previous 12 months, despite being weighed down by the $41.07 million Clive Peeters-related loss.
Harvey Norman did not respond to request for comment by the time of publication.