Harvey Norman
Encyclopedia
Harvey Norman is a large Australian-based retailer of electrical, computer, furniture, entertainment and bedding goods. It is effectively a franchise
and the main brand owned by Harvey Norman Holdings Limited. There are more than 230 Harvey Norman stores in Australia
, New Zealand
, Slovenia
, Ireland
, Malaysia, Croatia
and Singapore
altogether.
Harvey Norman Holdings Limited is franchisor of several other Australian retail chains such as Domayne, Space Furniture, Ariston Appliances and Joyce Mayne.
and Ian Norman opened their first store in 1961, which specialised in electrical goods and appliances. Its success prompted Harvey and Norman to expand the business and conducted talks with retailer Keith Lord who sought to expand his own retail group. They could not settle on a name for the new business, with Harvey and Lord reluctant to take on the other's name. They eventually decided to retain Norman's name and that of its first store manager Peter Ross. This spawned the retail chain Norman Ross.
Norman Ross became one of the largest appliance retail chains and by 1979 controlled 42 stores with sales exceeding $A240 million. In the early 1980s Alan Bond
and Grace Bros.
sought to acquire the chain, spawning a bidding war that saw Grace Bros incorporate the chain in 1982. Three weeks later however, a determined Alan Bond successfully convinced the Grace Bros. director Michael Grace to sell the chain to Bond. Shortly after, Harvey and Norman were given notice and redundancy package of six months pay. Reasons for their sacking were not publicised, although Harvey later told The Daily Telegraph
:
Norman Ross later went into liquidation in 1992. In October 1982, Harvey and Norman purchased a new shopping centre in outer Sydney
suburb Auburn
for $A3 million, and opened the first Harvey Norman store. The enterprise was intended to be a single store but its success led to the opening of others. Harvey Norman Holdings Limited was listed on the Australian stock market on 3 September 1987.
In the early 1990s Harvey Norman adopted the superstore format then successful in the United States
and entered the computer
and furniture
markets. Harvey Norman growth came organically until it acquired Joyce Mayne in 1998. Further acquisitions followed and by 2000 the chain had 100 stores.
As each section is a separate franchise the salespeople will only work within their franchise, for example, an employee in the computer department will generally not be permitted to assist customers in the furniture, bedding and electrical departments.
Each department also has its own checkout for its products.
The warehouse is shared by the separate franchisees.
, kitchen
, wardrobe
, home office
, bars
and home theatre
renovations, and features showroom franchises
in Victoria
, South Australia
and New South Wales
. The Victorian and South Australian outlets have since closed, leaving 5 New South Wales outlets in operation.
before June 2008. Harvey Norman has registered the brand name OFIS and as a result of the acquisition of former Megamart
and Retravision stores, has access to well-placed potential sites on which to open Officeworks-sized outlets. 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. They aimed to have 100 stores within ten years. In all, five OFIS outlets were established, but proved unprofitable and in February 2009 Harvey Norman stated it would close all of the stores by June 2009 and abandon the concept.
The first store, in New Zealand, started in 4 December 2007,1st floor, 28 Rutherford street, Lower Hutt, Wellington.
Ireland
Malaysia New Zealand
Northern Ireland
Singapore
Slovenia
The first Harvey Norman's store in Croatia
is due to open in Zagreb
in October 2011.
has had very close ties to Harvey Norman since 1995 and is heavily marketed in stores. Flexirent
is alleged to have strong elements of predatory lending
practises.
Franchisees are set targets for the number of Flexirent attachments per month by Harvey Norman Holdings, and in turn, franchisees set targets for individual sales staff. Individual sales staff provide their user ID to Flexirent at the beginning of an application for a customer, thereby attaching themselves to the customer's agreement as a referrer and earning "Flexichips" which can then be redeemed with Flexirent by the salesperson in the form of a prepaid Visa card or towards the purchase of other products. This is often supplemented at the discretion of individual franchise owners with "spivs" for reaching the monthly target, the combination providing a strong incentive for sales staff to promote it. Franchisees too receive incentives directly from Flexirent, typically 2-3% of the total value of the finance agreement. In addition, there is no admin cost to providing Flexirent sales, so the franchisee escapes paying the 2% finance admin fee applicable to credit card and GE finance sales.
In addition, Gerry Harvey
has himself asserted on primetime Australian television
in a January 2008 airing of Today Tonight
that Flexirent should be turned down by the average family. This is despite Harvey Norman's indiscriminate promotion of the product onto its entire customer base.
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
and the main brand owned by Harvey Norman Holdings Limited. There are more than 230 Harvey Norman stores in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
, Slovenia
Slovenia
Slovenia , officially the Republic of Slovenia , is a country in Central and Southeastern Europe touching the Alps and bordering the Mediterranean. Slovenia borders Italy to the west, Croatia to the south and east, Hungary to the northeast, and Austria to the north, and also has a small portion of...
, Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
, Malaysia, Croatia
Croatia
Croatia , officially the Republic of Croatia , is a unitary democratic parliamentary republic in Europe at the crossroads of the Mitteleuropa, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers ...
and Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
altogether.
Harvey Norman Holdings Limited is franchisor of several other Australian retail chains such as Domayne, Space Furniture, Ariston Appliances and Joyce Mayne.
History
Gerry HarveyGerry Harvey
Gerry Harvey is an Australian entrepreneur best-known for being the executive chairman of Harvey Norman Holdings Ltd., a large company which runs Australian retail chain Harvey Norman...
and Ian Norman opened their first store in 1961, which specialised in electrical goods and appliances. Its success prompted Harvey and Norman to expand the business and conducted talks with retailer Keith Lord who sought to expand his own retail group. They could not settle on a name for the new business, with Harvey and Lord reluctant to take on the other's name. They eventually decided to retain Norman's name and that of its first store manager Peter Ross. This spawned the retail chain Norman Ross.
Norman Ross became one of the largest appliance retail chains and by 1979 controlled 42 stores with sales exceeding $A240 million. In the early 1980s Alan Bond
Alan Bond (businessman)
Alan Bond is an Australian businessman noted for his criminal convictions and high-profile business dealings, including what was at the time the biggest corporate collapse in Australian history. Bond was born in the Hammersmith district of London, England, and emigrated to Australia with his...
and Grace Bros.
Grace Bros.
Grace Bros was an Australian department store chain, founded in 1885. It was bought by Myer in 1983. There were 25 stores across New South Wales and the ACT, until they were re-branded under the Myer name in 2004.-History:...
sought to acquire the chain, spawning a bidding war that saw Grace Bros incorporate the chain in 1982. Three weeks later however, a determined Alan Bond successfully convinced the Grace Bros. director Michael Grace to sell the chain to Bond. Shortly after, Harvey and Norman were given notice and redundancy package of six months pay. Reasons for their sacking were not publicised, although Harvey later told The Daily Telegraph
The Daily Telegraph (Australia)
The Daily Telegraph is an Australian tabloid newspaper published in Sydney, New South Wales, by Nationwide News, part of News Corporation.The Tele, as it is also known, was founded in 1879. From 1936 to 1972, it was owned by Frank Packer's Australian Consolidated Press. That year it was sold to...
:
Norman Ross later went into liquidation in 1992. In October 1982, Harvey and Norman purchased a new shopping centre in outer Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
suburb Auburn
Auburn, New South Wales
Auburn is a suburb in western Sydney, in the state of New South Wales Australia. Auburn is located 19 kilometres west of the Sydney central business district and is the administrative centre of the local government area of Auburn Council.-History:...
for $A3 million, and opened the first Harvey Norman store. The enterprise was intended to be a single store but its success led to the opening of others. Harvey Norman Holdings Limited was listed on the Australian stock market on 3 September 1987.
In the early 1990s Harvey Norman adopted the superstore format then successful in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and entered the computer
Computer
A computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
and furniture
Furniture
Furniture is the mass noun for the movable objects intended to support various human activities such as seating and sleeping in beds, to hold objects at a convenient height for work using horizontal surfaces above the ground, or to store things...
markets. Harvey Norman growth came organically until it acquired Joyce Mayne in 1998. Further acquisitions followed and by 2000 the chain had 100 stores.
Company structure
Harvey Norman's operating structure is unusual in that each store department (bedding, furniture, computer and/or electrical) is operated by a separate franchisee. Thus many superstores are a combination of three or four separate businesses with each franchisee contributing revenue to Harvey Norman Holdings Ltd through lease payments and a portion of sales.As each section is a separate franchise the salespeople will only work within their franchise, for example, an employee in the computer department will generally not be permitted to assist customers in the furniture, bedding and electrical departments.
Each department also has its own checkout for its products.
The warehouse is shared by the separate franchisees.
Home renovations
Harvey Norman Design and Renovations is a subsidiary of Harvey Norman Holdings Limited. The design and renovations arm of the company specialises in bathroomBathroom
A bathroom is a room for bathing in containing a bathtub and/or a shower and optionally a toilet, a sink/hand basin/wash basin and possibly also a bidet....
, kitchen
Kitchen
A kitchen is a room or part of a room used for cooking and food preparation.In the West, a modern residential kitchen is typically equipped with a stove, a sink with hot and cold running water, a refrigerator and kitchen cabinets arranged according to a modular design. Many households have a...
, wardrobe
Wardrobe
A Wardrobe is a cabinet used for storing clothes.Wardrobe may also refer to:* Wardrobe , a full set of multiple clothing items* Wardrobe , part of royal administration in medieval England...
, home office
Home Office
The Home Office is the United Kingdom government department responsible for immigration control, security, and order. As such it is responsible for the police, UK Border Agency, and the Security Service . It is also in charge of government policy on security-related issues such as drugs,...
, bars
Bar (establishment)
A bar is a business establishment that serves alcoholic drinks — beer, wine, liquor, and cocktails — for consumption on the premises.Bars provide stools or chairs that are placed at tables or counters for their patrons. Some bars have entertainment on a stage, such as a live band, comedians, go-go...
and home theatre
Home cinema
Home cinema, also commonly called home theater, are home entertainment set-ups that seek to reproduce a movie theater experience and mood with the help of video and audio equipment in a private home....
renovations, and features showroom franchises
Chain store
Chain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practices. These characteristics also apply to chain restaurants and some service-oriented chain businesses. In retail, dining and many service categories, chain businesses...
in Victoria
Victoria (Australia)
Victoria is the second most populous state in Australia. Geographically the smallest mainland state, Victoria is bordered by New South Wales, South Australia, and Tasmania on Boundary Islet to the north, west and south respectively....
, South Australia
South Australia
South Australia is a state of Australia in the southern central part of the country. It covers some of the most arid parts of the continent; with a total land area of , it is the fourth largest of Australia's six states and two territories.South Australia shares borders with all of the mainland...
and New South Wales
New South Wales
New South Wales is a state of :Australia, located in the east of the country. It is bordered by Queensland, Victoria and South Australia to the north, south and west respectively. To the east, the state is bordered by the Tasman Sea, which forms part of the Pacific Ocean. New South Wales...
. The Victorian and South Australian outlets have since closed, leaving 5 New South Wales outlets in operation.
Move into stationery
In August 2007, market analysts suggested Harvey Norman would launch a rival "big-box" stationery and office supplies competitor to OfficeworksOfficeworks
Officeworks is a chain of Australian office supplies stores which was established in the early 1990s by Coles Myer...
before June 2008. Harvey Norman has registered the brand name OFIS and as a result of the acquisition of former Megamart
Megamart
Megamart was an Australian chain of stores owned by Coles Group which sold electrical and furniture items. It was a sub-store of department store chain Myer, so it was also known as Myer Megamart or Megamart by Myer...
and Retravision stores, has access to well-placed potential sites on which to open Officeworks-sized outlets. In December 2007, Harvey Norman announced it would be opening its first two OFIS stores in Albury
Albury, New South Wales
Albury is a major regional city in New South Wales, Australia, located on the Hume Highway on the northern side of the Murray River. It is located wholly within the boundaries of the City of Albury Local Government Area...
and the Sydney suburb of Auburn
Auburn, New South Wales
Auburn is a suburb in western Sydney, in the state of New South Wales Australia. Auburn is located 19 kilometres west of the Sydney central business district and is the administrative centre of the local government area of Auburn Council.-History:...
in March 2008. They aimed to have 100 stores within ten years. In all, five OFIS outlets were established, but proved unprofitable and in February 2009 Harvey Norman stated it would close all of the stores by June 2009 and abandon the concept.
Norman Ross
Harvey Norman Holdings Ltd operates Norman Ross stores in New Zealand.The first store, in New Zealand, started in 4 December 2007,1st floor, 28 Rutherford street, Lower Hutt, Wellington.
Harvey Norman International
Harvey Norman's stores are in: AustraliaAustralia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
Malaysia New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
Slovenia
Slovenia
Slovenia , officially the Republic of Slovenia , is a country in Central and Southeastern Europe touching the Alps and bordering the Mediterranean. Slovenia borders Italy to the west, Croatia to the south and east, Hungary to the northeast, and Austria to the north, and also has a small portion of...
The first Harvey Norman's store in Croatia
Croatia
Croatia , officially the Republic of Croatia , is a unitary democratic parliamentary republic in Europe at the crossroads of the Mitteleuropa, the Balkans, and the Mediterranean. Its capital and largest city is Zagreb. The country is divided into 20 counties and the city of Zagreb. Croatia covers ...
is due to open in Zagreb
Zagreb
Zagreb is the capital and the largest city of the Republic of Croatia. It is in the northwest of the country, along the Sava river, at the southern slopes of the Medvednica mountain. Zagreb lies at an elevation of approximately above sea level. According to the last official census, Zagreb's city...
in October 2011.
Controversies
- In 1995 the ACCC acted 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 describing features that it did not, in fact, actually have.
- In 2000 before the Australian implementation of the Goods and Services TaxGoods and Services Tax (Australia)The GST is a broad sales tax of 10% on most goods and services transactions in Australia. It is a value added tax, not a sales tax, in that it is refunded to all parties in the chain of production other than the final consumer....
the ACCCACCCACCC may refer to:In Education:* Association of Canadian Community Colleges, a national association formed in 1972 to represent the interests of its member institutions to government and industry....
alleged that Harvey Norman advertised QuickenQuickenQuicken is a personal finance management tool developed by Intuit, Inc.Quicken runs on Windows and Macintosh systems. Previous versions ran on DOS. An online version is also available. The last version of Quicken for Macintosh computers was Quicken Essentials for Mac released in February 2010...
QuickbooksQuickBooksQuickBooks is a line of business accounting software developed and marketed by Intuit.-History:Intuit was founded in 1983 by Scott Cook and Tom Proulx in Mountain View, California, USA...
for $199 with bonus software valued at more than $900 while aware that the quantities of bonus software were insufficient to meet consumer demand. Harvey Norman was also alleged to have misled consumers regarding taxTaxTo tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
benefits associated with the purchase of QuickenQuickenQuicken is a personal finance management tool developed by Intuit, Inc.Quicken runs on Windows and Macintosh systems. Previous versions ran on DOS. An online version is also available. The last version of Quicken for Macintosh computers was Quicken Essentials for Mac released in February 2010...
QuickbooksQuickBooksQuickBooks is a line of business accounting software developed and marketed by Intuit.-History:Intuit was founded in 1983 by Scott Cook and Tom Proulx in Mountain View, California, USA...
and digital cameras.
- In November 2008, the company's chief executive, Gerry Harvey, was heavily criticised for comparing IrelandIrelandIreland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...
's economic problems with the Irish potato famine, an event which saw the deaths of over a million people. Harvey has since refused to apologise, admonishing the Irish for their poor sense of humour, stating: "It doesn’t say much about a people when they can’t take something like that on the chin and get on with it."
- On October 8, 2011, four environmentalistEnvironmentalistAn environmentalist broadly supports the goals of the environmental movement, "a political and ethical movement that seeks to improve and protect the quality of the natural environment through changes to environmentally harmful human activities"...
activists illegally climbed the Sydney Opera HouseSydney Opera HouseThe Sydney Opera House is a multi-venue performing arts centre in the Australian city of Sydney. It was conceived and largely built by Danish architect Jørn Utzon, finally opening in 1973 after a long gestation starting with his competition-winning design in 1957...
and spread out a banner over one of the sails reading "No Harvey Norman No! Stop selling Aussie forest destruction" as part of a protest against the retailer's profiting from environmental damage. A spokesperson for the protesters said in an interview the "profiting from the destruction of our spectacular forests is absolutely unacceptable". Harvey Norman had previously mentioned they were being "unfairly targeted" and were trying "their best" to sell products from sustainable timber. The protesters were arrested shortly after the event.
Criticism
FlexirentFlexirent
Flexirent Capital Pty Ltd. or more commonly Flexirent, is an Australian consumer leasing service of business and consumer electronics and is the primary product of FlexiGroup...
has had very close ties to Harvey Norman since 1995 and is heavily marketed in stores. Flexirent
Flexirent
Flexirent Capital Pty Ltd. or more commonly Flexirent, is an Australian consumer leasing service of business and consumer electronics and is the primary product of FlexiGroup...
is alleged to have strong elements of predatory lending
Predatory lending
Predatory lending describes unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly...
practises.
Franchisees are set targets for the number of Flexirent attachments per month by Harvey Norman Holdings, and in turn, franchisees set targets for individual sales staff. Individual sales staff provide their user ID to Flexirent at the beginning of an application for a customer, thereby attaching themselves to the customer's agreement as a referrer and earning "Flexichips" which can then be redeemed with Flexirent by the salesperson in the form of a prepaid Visa card or towards the purchase of other products. This is often supplemented at the discretion of individual franchise owners with "spivs" for reaching the monthly target, the combination providing a strong incentive for sales staff to promote it. Franchisees too receive incentives directly from Flexirent, typically 2-3% of the total value of the finance agreement. In addition, there is no admin cost to providing Flexirent sales, so the franchisee escapes paying the 2% finance admin fee applicable to credit card and GE finance sales.
In addition, Gerry Harvey
Gerry Harvey
Gerry Harvey is an Australian entrepreneur best-known for being the executive chairman of Harvey Norman Holdings Ltd., a large company which runs Australian retail chain Harvey Norman...
has himself asserted on primetime Australian television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
in a January 2008 airing of Today Tonight
Today Tonight
Today Tonight is a controversial Australian News and Current Affairs program, produced by the Seven Network and shown weeknightly at in direct competition with rival Nine Network program A Current Affair....
that Flexirent should be turned down by the average family. This is despite Harvey Norman's indiscriminate promotion of the product onto its entire customer base.
Sponsorship
Harvey Norman's major sponsorships include- The New Zealand BreakersNew Zealand BreakersThe New Zealand Breakers are a professional basketball team competing in the Australasian National Basketball League. The Breakers joined the NBL for the 2003/04 season as one of two expansion clubs. The club is based in the city of Auckland, New Zealand and play their home games at the North...
in the National Basketball LeagueNational Basketball League (Australia)The National Basketball League, also known as the iiNet NBL Championship for sponsorship reasons, is the pre-eminent men's professional basketball league in Australasia....
. - The North Queensland CowboysNorth Queensland CowboysThe North Queensland Cowboys are an Australian professional rugby league football club based in Townsville, Queensland. They compete in Australasia's elite rugby league competition, the National Rugby League premiership...
and the Cronulla SharksCronulla SharksThe Cronulla-Sutherland Sharks are Australian professional Rugby league team based in Cronulla, in the Sutherland Shire, Southern Sydney, New South Wales...
in the National Rugby LeagueNational Rugby LeagueThe National Rugby League is the top league of professional rugby league football clubs in Australasia. The NRL's main competition, called the Telstra Premiership , is contested by sixteen teams, fifteen of which are based in Australia with one based in New Zealand...
. - National Rugby LeagueNational Rugby LeagueThe National Rugby League is the top league of professional rugby league football clubs in Australasia. The NRL's main competition, called the Telstra Premiership , is contested by sixteen teams, fifteen of which are based in Australia with one based in New Zealand...
State of OriginRugby League State of OriginState of Origin is an annual best of three series of rugby league football matches contested by the Maroons and the Blues, who represent the Australian states of Queensland and New South Wales respectively...
series.