50 most powerful women in business: 4. Katie Page

HARVEY Norman chief executive Katie Page is one the longest-serving chief executives of an Australian-listed company.

DEAL-20150220 Katie Page, CEO Harvey Norman Pic : Steve Baccon

Chief executive, Harvey Norman

Market cap: $3.8bn

HARVEY Norman chief executive Katie Page is one the longest serving chief executives of an Australian-listed company. Yet her long-running role in the multibillion dollar international retail chain, which she joined in 1983 as a young assistant to the boss, and has been running since February 1999, has been overshadowed by her higher-profile husband Gerry Harvey. While Page is clearly happy with the arrangement, the net result has been a long-term underestimation of her role and influence in Australian business.

As chief executive, she runs a business that has more than 200 stores in Australia and seven other countries. It turns over more than $2.6 billion a year, and has franchise operations that turn over another $4.8bn. Its operations include furniture stores Joyce Mayne, Domayne and the more up-market Space and Poliform, and a property portfolio worth $2.2bn.

Page has also worked with Harvey to build up their jointly owned Magic Millions thoroughbred sales business with its flagship sale and racing events each January on the Gold Coast. They also own the upmarket Byron at Byron resort and spa at Byron Bay in northern NSW. She was the first woman director of the National Rugby League, is now a trustee of the Sydney Cricket and Sports Ground Trust, and has extensive connections at the highest levels of Australian business.

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After a difficult few years for retailing, in the wake of the global financial crisis and the rise of online shopping, which has seen the closure of some 26 group stores since mid-2012, Harvey Norman reported a net profit of $211.7 million last financial year – up by 49 per cent from a tough 2012-2013.

Straight talking and superfit, Page admits that running their various business interests draws on the combined strengths of her and her husband. (He is 75 and she is 58). “Gerry and I have been running the business since around 1987 [when the company was floated on the ASX],” says Page in an interview at the company’s modest head office in Sydney’s Homebush, near the city’s produce markets. “I took the title [as chief executive] around 14 years ago. There is no other consistent female [chief executive] out there and it just happens to be we are a husband and wife team. Gerry is the executive chairman. The chairman is there to make sure that the big picture is right. They are there for the big decisions. As chief executive, I am running the business. The board sets the strategy and I deliver it as chief executive. We have skill sets as a couple that probably make us stronger as a company compared with others,” she says.

“We are very good at property, we are very good at marketing, we are very good at retail. I am more of a tech freak. I love property as well, but Gerry is a sensation at property. There is no one part of the business that we don’t both understand or get involved with. But we have just got different passion levels. We have our money in this company, we have a passion for this company, we know every category, we put every ounce of effort we have into this business and we do it for the long term,” Page says. She says people who raise their eyebrows at the idea of a husband and wife team are “ill informed” and “in the dark ages”.

Page, who joined Harvey Norman when it had one store, points out that it is a very different business from others in Australian retail. “We are a unique company because we are both a retail and property company but also because of the brands we sell, which include furniture, bedding, electrical and computers.” She has a passion for design that has driven the company’s involvement in brands such as the high-end Space furniture company and Poliform, which sells high-end Italian designer furnishings.

She urges other young Australians to consider retailing as a career. “Overseas, retail is considered to be up there with banking,” she says.” In Australia it tends to be spoken about as if you are a cashier or something. It’s not just about selling fridges. “Look at our business – you can be in property, you can be in legal. You can be in marketing. You can be a franchisee or a sales person on the floor. The things I have been able to do in retail you can’t do anywhere else – it’s the touch point of everything. You are looking at sites, you have to have a strong IT background, you have to be a marketer. You have to be a trader.”

The years since the financial crisis were particularly tough for the company that has been exposed to the downturn in Europe. (It has operations in Slovenia, Croatia, Ireland and Northern Ireland). As chief executive, Page drove the overseas expansion which she notes was also approved by the board. It began with the expansion into New Zealand in 1996, which has been good for the company. Then followed the move into Singapore in 2000 and then Malaysia. The operations in Ireland are still losing money and Singapore and Malaysia have been hit by consumer spending cutbacks and operational issues.

Page points out that few people saw the GFC coming or predicted the full impact of its negative force on the world economy. “We had been dealing with some great furniture manufacturers in Slovenia. The opportunity was presented to us in 2003 to expand into Slovenia. The EU was expanding and Slovenia was set to become part of the EU. We saw it as a cheap entry to expand into Europe. In principle, it sounded good, but the GFC happened. It was the same in Ireland. We opened in Ireland and we were making money there. Then the GFC happened. The idea was that we would have a footprint in Ireland and Northern Ireland and, if all goes well, into the UK.” While the business in Ireland is expected to turn a profit next year, Page has no plans for any further international expansion. “The GFC put paid to all of that,” she says. But she argues that getting through the financial crisis has allowed her and her company’s top executives to hone their skills in a much tougher market. “It has been a really good exercise for me,” she says. “The 80s and the 90s were so fantastic in this country. It was easy. You talk to everybody and they say, ‘My God, wasn’t it easy?’. We are working in places like Ireland which have really had the worst time of it. We have had to work under very difficult circumstances and that has been a good exercise. You are testing your business and your skills. You are testing your people, you are testing yourself.”

She believes the outlook for retail sales in Australia has been improving in the past few months with the falling dollar, improved economic situation in NSW and southern Queensland and the drop in petrol prices. She and Harvey are a lot more upbeat about the economies of NSW and southern Queensland, where they have a lot of their stores.

Page has a strong network of friends and business relationships. She and her husband are long-time friends with advertising veteran John Singleton. They are also close with former Bankers Trust chief Rob Ferguson. She counts Naomi Milgrom, who she met in the early 80s when Milgrom was working as a teacher in Sydney, as a close friend. Milgrom returned to Melbourne to enter the family clothing business and now runs the Sussan clothing business. “Naomi is the number one retailer in this country,” Page says. “There are lots of good retailers in this country but Naomi has done extraordinarily well. She just gets on with it.” She has also known supermodel Elle Macpherson’s mother Fran who she met around the same time. “Gerry, Singo [John Singleton], Fran Macpherson, Naomi and myself. It’s a pretty interesting group. We are as tight as.”

Page says one of the secrets of running a good business is to have good people around you. “Gerry and I get the publicity but it is really the people who are running these businesses. We make sure we have really good people around us.”

She says being able to really understand marketing is critical for anyone running a business. “You have to have a marketing skill and you have to be able to sell. They are two different things. I meet a lot of people who have never been into the nitty gritty of the marketing and advertising of their company. But it is important you have that skill set.”

Page travels extensively, spending time with the leaders of the world’s largest companies including Samsung, Fuji Xerox, Lenovo, Electrolux and General Electric, speaking with them about their long term plans and their products of the future. “When I go to Stockholm, Keith [McLoughlin] who is the global chief executive of Electrolux, gets all the teams in and we have a dialogue for a day with all parts of his business. I can’t be sitting in Australia saying this is what my business is going to look like. I rely heavily on what I learn when I go overseas and talk to these global CEOs and their teams.”

Page is proud of how she and Harvey built up Magic Millions into one that rivals the Sydney-based Inglis in thoroughbred sales. She has been particularly active in events to boost the role of women in the racing business and has organised for Princes Anne’s daughter, Olympic equestrian Zara Phillips, to be an ambassador for Magic Millions.

Page rejects suggestions that Harvey Norman was slow to get into online. “We went digital in 2001.” She says Harvey was “misquoted” when people mistook calls of five years ago for a GST on goods under $1000 bought online overseas for an opposition to the concept of online selling. Since then Harvey Norman has boosted its online sales but Page won’t say how much online sales make up of the company’s total revenue. She argues that many online sales have actually started with a visit to the store to inspect the goods. “When companies say that 10 per cent of their sales come from online, I would ask how much of that 10 per cent actually started in the store? Everyone talks about whether you are in bricks and mortar or are you online? We see it as just total sales. How ever the customer wants to engage with us is fine. That’s why we are an omni-channel company.”

In recent times Page has cut back the company’s debt levels and rejected analysts’ suggestions that she loosen the purse strings and buy something new. “We are sticking to our knitting. We get a lot of opportunities. A lot of businesses come across our desks but it is trying to find something worthwhile investing in. We are like a lot of Australian companies – reducing costs, sitting on our cash and reducing debt. We won’t invest unless there is something worth investing in. We are not seeing it at the moment but it could come up tomorrow.”