Gerry Harvey’s huge warning after David Jones collapse
Harvey Norman co-founder Gerry Harvey has issued an ominous warning in the wake of the collapse of department store giant David Jones.
Australia’s oldest department store officially collapsed on Thursday after years of debt and decline in the face of rapidly-changing consumer sentiment.
The brand had already shrunk to just 38 stores after huge profit losses, a shrinking consumer base, inability to pay suppliers and top brands simply pulling stock from the 188-year-old icon.
Now, Harvey, founder of the hugely successful Harvey Norman empire has had his say and that DJs failure was “like someone close to you dying”.
Norman said he has been forced to change his own business in response to rapidly changing consumer preferences.
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David Jones is in free fall. Picture: Eleni Tzanos
“The day of the department store is probably over,” he said.
“I think every furniture, electrical leading retailer out there at the moment is under extreme pressure.
“We’re the landlord and we get all the figures of all the retailers, so we know what’s happening.
“So they’re nearly all down.”
As David Jones’ slowed, its debts began to grow and consumers turned to online shopping, Mr Harvey told The Nightly that the long time retail giant suffered a ‘brain drain’.
“You’ve got to understand fashion, cosmetics, advertising, promotions, retail, people,” Mr Harvey said.
“Today, they don’t exist. And then all their staff became part time. Some of them know a little bit about the product. The great majority don’t know anything.
RELATED: How David Jones destroyed its greatest asset and signed its own death warrant
Gerry Harvey. The Harvey Norman founder. Picture: Richard Dobson
“You run into them and say ‘can you tell me about something’ and they say ‘I’m going to university. I only work here two days a week’.”
As David Jones seeks to survive via a slimmed down business model, Australian Chamber of Commerce and Industry CEO Andrew McKellar said the retail giant’s fall was a big warning to the Albanese Government.
“Australian retailers, like many businesses across the country, are telling us the same thing: costs are rising faster than they can absorb them, rising interest rates will make this worse,” Mr McKellar said.
“This is a warning government cannot ignore, and it is why we need serious economic reform to take the pressure off business and households.”
Under the stewardship of Gerry Harvey, electrical giant Harvey Norman continues to perform well despite the challenging economic climate.
Harvey Norman is still going strong. Picture: Evan Morgan
Over the past financial year, through June 30, Harvey Norman’s sales revenue rose 3.1 per cent to $9.64 billion. It’s profit before tax rose 4.9 per cent to $720.29 million.