Harvey Norman

Company Overview

Harvey Norman Holdings Ltd (HVN) operates franchised and company-owned stores throughout Australia and New Zealand. The company has amassed a significant property portfolio, many of the buildings have HVN as the anchor tenant. It has also opened stores in Ireland as well as in Slovenia.

Company History

HVN, which opened its first store in 1982, is a phenomenal growth story. The company listed on the ASX in 1987, at which stage total sales were A$116M. This has grown to over A$4B. The group began operations in Australia and expanded into New Zealand in 1997, Singapore in 1999 and then into Slovenia and Ireland in 2002 and 2003, respectively. In 2001, HVN acquired control of Rebel Sport Limited, which it later sold for a tidy profit in 2007.

Differentiating Factor

HVN is the leading furniture, computer and electrical retailer in Australia, with a share of less than 20% of a highly fragmented market. The success of the franchise formula lies largely in the franchisees having direct ownership in their business, as opposed to just managing them. Against this, HVN supports the businesses and leverages its substantial buying power to ensure franchisees remain competitive.

Major Customers & Competitors

HVN stores in Australia are mostly operated under a franchise structure and the bulk of HVN's revenue is derived through providing advisory services and charging advertising fees to its franchisees. The HVN stores target a broad profile of householders and small businesses throughout Australia and New Zealand and are mostly regional-based. HVN's competitors include JB Hi-Fi and other specialty home entertainment specialists as well as electrical retailers such as Clive Peeters.

Additional Facts

• Current market capitalisation is $3.28 billion as at 30 June 2008

• Employees – Flemington Corporate Office in Homebush, approximately 600

• Employees – Australian franchised operations, approximately 13,000

Management Structure...