After years of sales and profit declines in his Harvey Norman retail chain, Gerry Harvey finally has a reason to smile.
Sales in Harvey Norman stores have lifted in the past six months and Mr Harvey, the company’s co-founder and chairman, says the outlook for the next year is good.
Interest rates are at historic lows, the Australian dollar has fallen and consumer confidence is expected to improve after the September 7 federal election.
“At the moment everyone in Harvey Norman is a bit more confident than they have been for a long time,” he told AAP.
“With what’s happened in the last few months and then confidence levels increasing again after the election, and low interest rates and a bit of inflation in our products, you would be thinking you’d be looking towards not only higher sales but higher profits,” he said.
Harvey Norman made a profit of $142 million in the 2012/13 financial year, down 17.5 per cent from the previous year.
That was largely due to further falls in the value of its properties.
Total sales were down three per cent in the year, and sales in Australia dropped by 4.2 per cent.
But those falls occurred in the first half of the year, with the company recording growth in its Australian, New Zealand and Irish operations between January and June.
In July, global sales rose by 5.3 per cent, compared to the same month a year ago.
Mr Harvey admitted the past few years had been difficult for Harvey Norman, but said the company appeared to have finally turned a corner.
“We’ve had a lot of issues with the GFC and inflation and our computer stores and all sorts of things that have made our life pretty bloody difficult, and we’ve just had to work through all those issues,” he said.
“We’re not through them by any stretch but we’re in a better position than we were any time last year.”
The company’s stores in Croatia and Serbia remain its weakest point, with sales down nearly 10 per cent in the three months to June 30.
Investors welcomed the company’s positive outlook and recent sales performance, pushing Harvey Norman shares 13 cents higher to $3.01.