Harvey Norman

Harvey Norman Holdings Ltd.[1]
Type	Public (ASX: HVN)
Founded	Auburn, Sydney (October 1982)
Headquarters	Flemington, Sydney, Australia
Key people	Gerry Harvey, Chairman/Co-Founder Ian Norman, Co-Founder John Slack-Smith, Chief Operating Officer Kaite Page, Managing Director Chris Mentis, Chief Financial Officer
Industry	Retail: Computer, Electrical, Furniture and Bedding goods
Employees	Est. 10,000 (Australia Only) 407 (Flemington Headquarters) (September 29 2006)
Slogan	Go Harvey, Go Harvey, Go Harvey Norman, Go!
Website	Harvey Norman Homepage

Harvey Norman is a large retailer of electrical, computer, furniture and bedding goods based in Australia. It is effectively a franchise and the main brand owned by Harvey Norman Holdings Ltd. Currently there are more than 160 Harvey Norman stores in Australia, New Zealand, Slovenia, Republic of Ireland, Malaysia and Singapore. Harvey Norman Holdings Ltd control other prominent Australian retail chains such as Domayne, Space Furniture, Ariston Appliances and Joyce Mayne.^[2]

Contents 1 History 2 Company structure 3 Sales environment 4 Controversy 5 Home renovations 6 Move into stationery 7 References 8 External links

History

The very first Harvey Norman store was officially started by business partners Gerry Harvey and Ian Norman in 1961. The original store specialized in electrical goods and appliances and experienced immediate success prompting Harvey and Norman to seek expansion of the business. The pair conducted talks with fellow retailer Keith Lord who sought to expand his own retail group however there was disagreement as to what the new business would be called. Both Harvey and Lord were reluctant to take on the others name but it was eventually decided that the new retail chain would retain Norman's name and the name of the new company's first appointed store manager Peter Ross. This spawned the successful Australian retail chain Norman Ross that would be prominent from 1962 to 1988. ^[3] Norman Ross grew to become one of the largest appliance retail chains in Australian and as of 1979 controlled a total of 42 stores and posted sales of more than $AU 240 million. In the early 1980s Alan Bond and Grace Bros. sought to acquire the chain spawning a bidding war that would see Grace Bros incorporate the chain in 1982. 3 weeks later however, a determined Alan Bond successfully convinced the current Grace Bros. director Michael Grace to sell him the chain. Shortly after the sale Harvey and Norman were given notice and redundancy package of six months pay. Reasons for the sacking of the two was not publicized, however in an interview with the daily telegraph Gerry Harvey was quoted:

"I said I wished Bond would pack up his marbles and go back to Perth. Then I got a telegram telling me I was sacked."^[4]

The pair continued in retail purchasing a new shopping centre in Auburn; an outer suburb of Sydney for $AU 3 million thus beginning the first of the successful Harvey Norman chain stores. It was originally intended to be only a single store however its now well known discount formula proved to be greatly successful and a number of other stores soon opened. Eventually this resulted in its public offering and official listing on the stock market as Harvey Norman Holdings Ltd. on September 3, 1987.

In the early 1990s the Harvey Norman adopted the superstore structure that at the time was experiencing success in the United States. During the 1990s it would successfully enter the computer and furniture markets. Harvey Norman growth came organically until its first acquisition of Joyce Mayne in 1998. From then on a number of acquisitions were made and in 2000 the chain had incorporated its 100th store. The high profile company continues to expand both locally and overseas and is now seen as a competitor to Australia's largest retail chains such as Coles, Woolworths, Myer and David Jones.^[5]

Company structure

Harvey Norman is unusual it its operating structure insofar that each separate store is operated by a franchisee whom is responsible for their own department, be it furniture, computer or electrical. For these reasons, many superstores are in fact a culmination of 3 separate businesses. Each franchisee contributes revenue to Harvey Norman Holdings Ltd through lease of the property and a portion of sales. Harvey Norman advocates that this allows the company to better integrate with communities in that the store owners and operators are prominent members themselves of the community. The store is also able to contribute to the local community by contracting local business in maintenance, advertising and transport requirements. It is this unique corporate structure that can cause disgruntlement in customers unfamiliar with it. For example, an employee in the computer department is generally not permitted to assist customers in the furniture and electrical departments and will generally refuse service to customers. Camcorders and digital cameras are a common source of customer frustration as they are often displayed in the same cabinet. The issue is that camcorders fall under the electrical category whereas digital cameras are a part of the computer section.

Customers also purchasing large items in more than one department are also often disgruntled when it is pointed out that purchases need to be processed by each department. ^[6]

Sales environment

Harvey Norman is a high pressure sales environment. This reputation arises from the commission system generally paid to all full-time staff, some experienced casual and part-time employees. In addition, salespeople are often given incentives to sell particular products through promotions by particular manufactures and managers. Salespeople have their sales consistently scrutinized by management for potential improvements and possible misconduct. Statistics are very important in the Harvey Norman sales culture and salesman consistently seek to improve their scores through pride and/or competition.

Controversy

Harvey Norman has been affiliated with a number of controversies in recent times.

• In 2000 before the Australian implementation of the Goods and Services Tax Harvey Norman was alleged by the ACCC to have advertised nationally Quicken Quickbooks for $199 with bonus software valued at more than $900 when parties were aware that the quantities of bonus software were insufficient to meet consumer demand. Harvey Norman was also alleged to have misled consumers in their catalogue as to tax benefits associated with the purchase of Quicken Quickbooks and digital cameras before the introduction of the GST. ^[7]
• Harvey Norman have commonly come under fire for distributing knowingly catalogues with unacceptable amounts of errors. In 1995 the ACCC took action against Harvey Norman for knowingly distributing a catalogue which included more than 20 errors. These included illustrations of sale items with incorrect accessories or functions and packages describe to have features that it did not, in fact, actually have. Other errors such as incorrect illustrations and pricing are generally rather prevalent in Harvey Norman catalogues. ^[8]

Home renovations

Harvey Norman Design and Renovations is a subsidiary of the Harvey Norman Holdings Ltd.. The design and renovations arm of the company specialises in bathroom, kitchen, wardrobe, home office, bars and home theatre renovations, and features showroom franchises in three states of Australia, Victoria, South Australia and New South Wales. The company looks likely to eventually expand its market share to include showrooms in all states of Australia.

Move into stationery

In August 2007, market analysts suggested Harvey Norman would launch a rival "big-box" stationery and office supplies competitor to Officeworks before June 2008. Harvey Norman has registered the brand name "Ofis" and resulting from acquisition of former Megamart and Retravision stores had access to well-placed potential sites on which to open Officeworks-sized outlets.^[9] In December 2007, Harvey Norman announced it would be opening its first two Ofis stores in Albury and the Sydney suburb of Auburn in March 2008. It aimed to have 100 stores within ten years. ^[10]

References

External links

• Official Harvey Norman Website
• Extensive Harvey Norman History by Answers.com
• Official Harvey Norman Digital Download Store