Harvey Norman Eyes off Asia, Declaring No New Stores for Australia

In the wake of the government’s dismissal over lowering the GST-threshold, Gerry Harvey announces his 2012 focus will be on the asian retail market, as well as launching more offshore websites to avoid GST.

For the first time in 30 years Harvey Norman will not be opening a new store in Australia declared chief Gerry Harvey.

Speaking to the Australian Financial Review, Harvey said, “It’s got to the stage where there’s no incentive to open a major new store in Australia. None. Our rate of expansion in Australia would be lower now than it’s ever been in ­Harvey Norman’s history.”

“It’s a turning point in retail – some will survive, some won’t. The whole Australian economy is running on resources. The rest – retail, tourism, media – we’re all struggling,” he commented.

The electronics retailer is instead turning its bricks-and-mortar attention offshore to South-East Asia, particularly Malaysia, where it intends to open ten new stores by the end of the year.

Once the face of the Retail Coalition, it seems Harvey is now strategically taking advantage of the GST-threshold on overseas purchases, which he campaigned so passionately to lower.

In late 2011, along with unveiling its local e-commerce offering, Harvey Norman also launched a website based out of Ireland to allow its customers to purchase computers games GST-free. Harvey indicated to The Australian the “odds are very high” that the retailer will soon also begin selling tax-free laptops, computers, digital cameras, mobile phones and iPads on offshore websites.

However, there is apparently no pleasure in these forays for the retail doyen who told The Sydney Morning Herald, “We are not doing this with a great deal of joy. We have been able to do this for a long time, we have held off. But you get to a point where you can’t hold off.”

With regard to the GST-debate, although being labelled a ‘whinger’ by Australian Treasurer Wayne Swan, Australian entrepreneur, Dick Smith has backed Harvey’s argument, telling The Australian:

“A globalised market cuts in both directions and, with the politicians’ and media’s help, we are kidding ourselves if we keep thinking there won’t be a price to pay for all the products we are buying off the internet without paying tax.

“Either jobs will go or wages will be cut, or it could be both… If we want low global prices, then we will most likely have to accept low global wages and working conditions. That’s the rarely mentioned dark side of the GST-free bargains we are getting online.”

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