Harvey Norman boss Gerry Harvey says shoppers were ‘chasing bargains’ in November

Billionaire retailer Gerry Harvey says he did a roaring trade over Black Friday, but this could make for a quiet Christmas.

Billionaire chairman Gerry Harvey says shoppers were “chasing that bargain” through Black Friday sales in November, which should make Christmas a quieter period for the retailer which on Wednesday was hit with one of the biggest protest votes this AGM season over its remuneration report.

Investors slapped down to the way Mr Harvey and his board run the company, delivering an 81.83 per cent vote against the remuneration report at the retailer’s annual general meeting to earn it a “first strike”. It is one of the largest votes against a remuneration report for a large ASX-listed company, and is just short of the near-83 per cent vote against the remuneration report for Qantas at its AGM this month. Shareholders could vote to spill the board if 25 per cent or more votes are cast against the pay report at next year’s meeting.

Turning to trading conditions, after the AGM Mr Harvey told The Australian the chain had experienced a strong November fuelled by people chasing bargains as part of the Black Friday and Cyber Monday sales campaigns.

“It is interesting that our sales over the last week have been so high, so it means people are really chasing that bargain and so now that will make Christmas a bit quieter,” Mr Harvey told The Australian.

“But I think we will have a good Christmas.”

Billionaire Gerry Harvey. Picture: Glenn Hampson

Mr Harvey said looking around at his competitors and the retail landscape in general, it was a very strong Black Friday-Cyber Monday sales campaign this year, with sales at his Australian stores showing improving growth since October.

However, he added, the current wet and cooler summer along the east coast was denting demand for his chain’s range of airconditioning and outdoor furniture, while traditionally strong categories such as coffee machines and air purifiers continued to do well.

It comes as Harvey Norman held its annual general meeting on Wednesday where Mr Harvey told shareholders the Harvey Norman share price would eventually return to above $7, from its current levels of around $3.70, with the stock trading well below the value of its net tangible assets.

He told investors that Harvey Norman’s $4bn property portfolio included highly valuable parcels of land in key cities that would only grow in value and was strategically held for future use that could include new Harvey Norman stores, warehouses or other property developments.

Investors were also provided with a trading update where Harvey Norman reported an 11.9 per cent slide in comparable sales for its flagship Australian stores for July to November, as shoppers pull back on discretionary spending in the face of rising interest rates, rents and other cost of living pressures. Australian store sales were weaker by 11.6 per cent in terms of total sales. This was an improvement on the 12.6 per cent fall in sales for the month of July and better than the 13.9 per cent sales fall at its flagship Australian store network between July and September.

Total sales across Harvey Norman’s global operations, that include south east Asia and Europe, fell 7.8 per cent between July and November.

Speaking to The Australian after the AGM, Mr Harvey said Boxing Day may not be as strong as normal given the sales now pulled early into November, fuelled by the deals and excitement around Black Friday and Cyber Monday.

“It wasn’t just us, it was every retailer, it was hot.”

Mr Harvey said most households were still resilient despite the pressure from higher interest rates and rents, although the bottom segments of the economy were doing it tougher with rising inflation and cost of living pressures.

He was concerned about the affordability of housing and said building and land prices were growing strongly year by year to make the ability to provide affordable housing almost impossible.

“I find it amusing that they talk about affordable housing. I don’t know how you do it. The cost of land keeps going up, the cost of building keeps going up. So, how can you have an affordable house? It’s not possible.”

Mr Harvey said it was increasingly difficult for Harvey Norman to find parcels of land to build new stores and that when they did secure land it was as much as 30 per cent more expensive than two years ago to build a Harvey Norman store.

A Harvey Norman store in Adelaide. Picture: Dean Martin/NCA NewsWire

Turning to the Harvey Norman share price, which is down almost 13 per cent in the last year, Mr Harvey told investors at the AGM that it was a “guarantee” one day it would return to $6, $7 or $8 a share but until then “just hang around”.

Also at the AGM, he engaged in a heated argument in some moments with a representative of the Australian Shareholders Association over remuneration and board responsibilities. In the argument Mr Harvey told the ASA member that he “represented nobody” and he later also turned on proxy advisers who often disagreed with his corporate governance of Harvey Norman.

“I’m not a fan of proxy advisers, you might have noticed,” he told the meeting.

This was not surprising too given proxy advisory angst over Harvey Norman boardroom and governance practices stretching for decades and at the AGM Harvey Norman earning a ‘first strike’ against its remuneration report with a more than 81 per cent vote against the remuneration report.

However, Harvey Norman directors, including Mr Harvey, his wife and chief executive, Katie Page, own just over 50 per cent of the company and couldn’t vote on the remuneration report.