It’s all go at Harvey Norman as retailer is not down or under
Once the group’s problem child, Ireland is now the fastest-growing part of the Aussie retailer globally, which is good news for Blaine Callard
“Electronics is becoming more like the fashion industry. It must be fresher, cleaner, more aesthetic.” Blaine Callard, CEO of Harvey Norman in Ireland, at the retailer’s store at Airside Retail Park.Photograph: Alan Betson
In a corner of Harvey Norman’s Dublin head office, there is a bottle of champagne the size of a fire extinguisher. It lies in a glass case bearing an inscription: “Break glass in case of profit. To be opened after one quarter of consolidated net profit.”
Blaine Callard, the company’s chirpy chief executive in Ireland, gazes longingly at the big bottle of bubbly. It is 11 years since the listed Australian furniture and electronics retailer entered the market here, yelling at people in bawdy radio advertisements about its sofas and televisions.
Harvey Norman, which has sales of about €140 million from its 12 stores in the State and two in the North, has racked up losses of more than €110 million since its entry. The champagne had better be a decent vintage.
“This is our shrine to optimism,” says Callard, who was parachuted in to Ireland from Harvey Norman’s Slovenian operation in 2010. The case is covered in positive newspaper articles about the economy.
“As soon as we get into profit, I’m breaking this bloody thing out and we’re all going to celebrate.” He looks like he means it, too.
One of the first things Callard did upon his arrival was to kill off the radio advertisements that were damaging its brand. Letters from customers pleading for them to end adorn the wall of his office. “Go, Harvey, Gooo!”, the ads’ rallying cry, became an apt slogan. Just not in the way the company had intended.
Callard, born in Melbourne but raised in the Gold Coast, was brought in to turn around the then ailing Irish operation. And he appears to have succeeded.
They won’t be breaking out the champagne for at least 18 months – the latest trading update from its parent indicates that Ireland’s operating loss in the year to June fell 37 per cent, but was still €10.5 million. But Harvey Norman is definitely a retailer on the up.
Sales are rising rapidly and Ireland, once the group’s problem child, is now the fastest-growing part of the Harvey Norman operation globally with sales rising 4.2 per cent.
The buzz in its head office is even a bit Tiger-era retro for a home furnishings and consumer electronics retailer in Ireland, where consumer confidence was supposed to be an oxymoron until recently.
Callard, an enthusiastic retailing evangelist, insists the group, which has 800 staff in Ireland, has some way to go yet.
“There’s still a slight misconception about our brand,” he says. “I think it’s because we used to shout at people. They thought we were all concrete floors and stuff on pallets.
“But then they come into our stores and they’re surprised. Everything is all laid out nicely and we’re stuffed full of brands.”
Harvey Norman Ireland’s big idea was to invest heavily in its stores during the recession, sexing up its furniture range and sharpening the layout and design of its electronics departments, which account for more than two-thirds of sales.
Going shopping, Callard says, should be “an enjoyable, interactive experience”. A mile or so from the group’s head office, he takes me for a walkabout of its sprawling unit in Airside Retail park in Swords, to show what he means.
Retail is under his skin, now. There is an intensity about him once he hits the shop. It’s raining buckets when we arrive at Airside. “We love the rain,” he insists. “It brings people into our stores.”
The Swords unit is 5,295sq m (57,000sq ft) of sofas, luxury beds, furniture, electronics and kitchen equipment. For some people, that’s 1.3 acres of misery.
Cavernous outlets such as this can be the place where divorces are born. You know the drill: bored-out-of-their-face husbands trudging along sulkily in the search for a new suite, or wives looking to the heavens as they are dragged through the laptop section, again.
The Swords outlet, however, has a relaxing ambience. Whisper it, but men might even enjoy a saunter around the place. The lighting is warm and the furniture isn’t piled up in unnatural rows. Rather, it is arranged in room-like attractive clusters that have clearly passed the eye of an interior designer. There is a perfumed whiff in the air from the scented candles of the homewares section.
“Sit back, relax, pretend you’re at home,” says Callard, as he tries to sell me a new cinema-style couch, complete with cup holder and ice box.
Most of the furniture ranges are modern – Callard drafted in a 30-year-old Kiwi with whom he worked with in Slovenia to revamp the entire furniture offering.
“People think you have to be either a discounter or top end like Arnotts, ” he says. “But you can make your store look attractive for little investment, and still be competitive. It’s like the Zara model – a premium look with value pricing.”
“We’ve done the work, but you don’t get the rubber on the road until the consumer recovery picks up. Our stores look a lot different to what they did three years ago – we put a lot of work in.
“I wouldn’t want to be coming out of this recession having hibernated for three years. It’d be too late to start investing now.”
On the other side of the store is the snazzy consumer electronics and kitchen appliances departments, which received a €500,000 revamp in the summer. The lighting in here is crisper, whiter than the furniture and bedding areas.
Callard has hooked in the interior designers from the furniture section to lay out entire kitchens at one end of the department, past the televisions and white goods. Along one wall there is a large Nespresso department, while in the centre of the department is a fully-functional, live kitchen.
Callard walks in behind the stove, flicks a button, and an extractor fan rises out of the countertop on a motor. He beams like he’s won the lotto.
The entire scene is broadcast live onto a large television screen above the kitchen. Callard looks for all the world like he’s about to kick off an episode of Ready, Steady, Cook.
“Old-style retail is dying. The tired, dusty electrical store, the men’s shed, that’s gone. It’s as much about how things look now than anything else.
“You can’t take a beautiful looking product like a €5,000 curved TV and put it in a dusty old shop. Electronics is becoming more like the fashion industry. It must be fresher, cleaner, more aesthetic.”
Harvey Norman is understood to be the second biggest player in the Irish electrical and electronics market, behind Dixons, and is well ahead of Power City. Callard says his stores sell one in three of every iPad sold in this country.
Back at head office, he suggests further expansion might be on the cards. The chain may look to open another store in Dublin. “I’d like another Dublin store, maybe central in the city or even over Liffey Valley way.”
It is also hoping to open another unit in Galway, but can’t find a suitable site. “We’re currently engaged with five potential projects in Galway with developers and banks. Somebody has to build us a store or we have to build it ourselves. There is no unit in Galway right now that suits us.”
Is the company jumping the gun, ploughing ahead before the consumer recovery has properly bedded down?
“There is a renewed confidence among people now to do up their home. People are increasingly looking to buy more than one item. To me, that means these purchases are being underpinned by a real return to confidence.”
The confidence and enthusiasm at Harvey Norman head office is palpable, even disarming.
The company, unusually for an Irish retailer, does all of its own advertising and media-buying in-house and several staff are waylaid designing new brochures before they go to print.
Callard “won’t allow anyone to come between our communications with our customers. It’s an intimate relationship”.
Perhaps all this turbo-charged marketing whizz bang is a function by Callard’s intense personality. Or perhaps the optimimism is perfectly justified.
It doesn’t really matter – at least people aren’t speculating anymore whether it will quit the Irish market, as they were a few years ago. Its founder, Harvey, even famously labelled the country a “basket case” as the economy unravelled.
“He was over here 18 months ago. He said he couldn’t believe we were losing all this money and yet there was such positivity. He said you’d think we were making all this money.
“He went back and spoke about it on Aussie radio. He’s talking up Ireland again.”
Perhaps the country is on the way back, after all. CV Name: Blaine Callard Age: 42 Job: Chief executive, Harvey Norman Ireland Lives: Malahide, Dublin Family: Married, no kids, two dogs Education: University of Queensland (law and arts dagger with psychology) Hobbies: Water skiing, horse riding, snow skiing
Something we might expect: “I’ve always been work obsessed. The older I get, the more conscious I am that I need to balance that out.”
Something that might surprise: “I have a music studio at home and I’ve started doing classic music compositions. They’re almost mathematical – you think of nothing else when you’re doing it. I can’t think about work, so it’s good for me”