Harvey Norman targets Irish property developers
Apartment fitouts new revenue stream for furniture chain amid Covid-19 uncertainty
Harvey Norman’s digital sales grew almost 40 per cent in the 12 months to the end of June last year, its accounts note. Photograph: Cyril Byrne
Harvey Norman, the Australian furniture and electronics chain with 16 stores in Ireland, wants to team up with property developers to fit out more blocks of apartments, after completing its first deal last year for a luxury development in Dublin’s Ballsbridge built by developer brothers, Luke and Brian Comer.
The retail chain said it fitted out 88 “super prime” apartments at the Comer Group’s Number One Ballsbridge development, according to a note attached to the retailer’s 2019 accounts signed off last month.
The apartments hit the market last year with monthly rentals of close to €4,000. Harvey Norman supplied furniture and bedding for the units.
“This [apartment fitouts] is a new business stream which we expect to grow in future as building completions increase across the country,” said the directors of Harvey Norman.
The pandemic has since stymied many building projects, however, with home completions forecast to drop to about 16,000 this year, down from a pre-virus forecast of about 25,000.
Before the pandemic hit, Harvey Norman was in the middle of a huge sales surge, driven by a booming Irish economy in the 12 months to the end of June 2019. Total group turnover grew by 14.5 per cent to more than €236 million. The group’s profits jumped from just €107,000 the previous year to €16 million in 2019.
The performance captures only 15 of its 16 stores, with the latest only opened last month.
After years of funding losses before the recent financial turnaround, Harvey Norman had accumulated losses of well over €100 million in the Irish market. However, its Irish balance sheet was transformed last year after a contribution of about €103 million from it Australian parent, which appeared to come in the form of a loan write-off.
The directors of the business, which currently includes 14 stores in the Republic and two in Northern Ireland, also revealed in a note signed off last month that the impact of the pandemic on its operations “has not been as severe as initially predicted” because a surge in online sales more than made up for the closure of its outlets during lockdown.
Harvey Norman’s digital sales grew almost 40 per cent in the 12 months to the end of June last year, the accounts note. Meanwhile, a stock market update by the parent group in Australia last month suggested that group total Irish sales actually rose by 25 per cent in the five months to the end of May, in Australian dollars. A strong euro versus the dollar accounts for only a small portion of the surge.
Its directors said they still expected the next 12-18 months in Ireland to be “very challenging”, however.
The group employs more than 1,000 staff in Ireland. It opened its 16th Irish store in Galway last month, while it plans to press ahead with another new outlet in Sligo at the end of October. Sales at its flagship outlet in Tallaght in west Dublin surged last year by 20 per cent, it said.