The big story in the Fairfax press today is about how the retail giant and business killer, Amazon, could be here in 60 days in time to ruin the best time of the year for our retailers — Christmas! And this is the kind of ‘present’ that could whip our top retailer Gerry Harvey into a rage of hurricane proportions, where his reaction is likely to be: “Bah, humbug!”
Already this week Gerry has blown off at the media asking him questions about Amazon, his accounts, his franchisees and his future profits. I copped his measured fury in an interview on Wednesday, which is on our website, where I concluded that if nothing is really wrong to justify the 12% drop in his share price then it must be because of the nasty short-seller out there.
Gerry agreed implying that without the short-seller that his share price would truly reflect the condition of his business and its promising future. So, I asked him if he knew the bloke selling his company down and he said yes and went further to name him as John Hempton of Bronte Capital.
This quite surprised lots of people on the ‘twittershere’ and has become a lead story in Rear Window in today’s AFR.
And all of this gets down to whetehr or not Mr Hempton or Gerry is right on how Harvey Norman will perform when Amazon comes to town.
Gerry told me is not phased by Amazon and is certain his bricks and mortar business, with its online offering, will be able to price match his US rival and still maintain good profitability.
However, some fund managers and retail analysts have their doubts, and when doubt comes to the stock market sellers outnumber buyers.
The first test of who’s right might come by February next year when we see how Xmas sales went after the Amazon eagle has landed.
My view is that they have to hit and hurt Harvey Norman and JB Hi-FI but you, as an investor, underestimate these great businesses and their
leaders — Gerry, his wife Katie Page and JB’s Richard Murray — at your peril.
At the end of my second interview with Gerry that was shown on the Sky Business Channel on Thursday, Gerry made an impassioned case for why someone should believe in Harvey Norman. And it’s the passion he shows that I seldom see from CEOs and chairmen, of public companies that makes me hope that Gerry gives Amazon a real run for their money.
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