Harvey Norman suffers Q2 sales drop

Harvey Norman has suffered a sales decline of nearly seven percent in the past quarter, blaming the drop on the ensuing fallout from its $55 million buyout of retailers Clive Peeters and Rick Hart.

In a statement to stockholders today, Harvey Norman reported a second quarter drop of 6.8 percent compared to the same quarter in 2010.

IT product sales rose in the past quarter but dollar revenue declined due to ongoing price deflation in the TV and computer categories.

Net profit after tax dropped just over 2 percent to almost $129 million.

In August last year Harvey Norman reported a $41.07 million loss from the July 2010 purchase of Clive Peeters and Rick Hart.

In November 2011, it announced administrators had been appointed to three failing Clive Peeters/Rick Hart stores in Victoria and Western Australia.

Seven more of the purchased stores will be shut down over the coming year with the remaining 16 to be rebranded as Harvey Norman outlets.

The retailer has forecast ongoing challenging conditions for the IT category in the coming six months, highlighted by the recent closure of one of two remaining Harvey Norman Canberra outlets.

In contrast, Harvey Norman says it is on track to open a 32,600 sqm homemaker centre in Maroochydore, Queensland in October this year.

The mega-centre will consist of Joyce Mayne, Domayne, Harvey Norman and other non-related retail outlets. 

Harvey Norman's head of computers Ben Macintosh told CRN last week the retailer is currently studying new store opportunities all around Australia, specifically in Canberra and Sydney, and wouldn’t rule out new shopfronts opening this year.