Let’s finish the week with something different by looking at three things that have grabbed my attention over the last few days.
The first is some really interesting research produced after Harvey Norman’s profit result this week, which saw Gerry Harvey announce a 9% lift in net profit to $252.26 million and then bemoan the extreme consumer caution that he and other retailers are battling.
But as analyst at Morgan Stanley suggested, perhaps we’re looking at Harvey Norman in the wrong way – instead of seeing the company as a retailer, we should see it as a property company.
About 30% of Harvey Norman’s earnings were generated by the rent paid by franchisees – the biggest contribution ever from the property division.
While the size of this contribution was exaggerated by the poor performance of the retail business, the numbers are compelling – Harvey Norman has a market capitalisation of about $2.2 billion and its property assets are worth $1.9 billion.
It’s an interesting way to see our retailers, isn’t it?
A fascinating story coming out of the US overnight concerns the founder of influential TechCrunch blogger Michael Arrington, who has announced he will take a “back seat” role at TechCrunch and start a $US20 million investment fund to target young start-ups.
While many would question the ethics of such a move, Arrington says he does not actually consider himself to be a journalist (although he regularly breaks great stories) and he will disclose all investments made by the fund in any future posts.
His employer has been most accommodating – AOL, which bought TechCrunch last year for a reported $US30 million, has actually put $US10 million into the fund.
I’m not sure how I feel about this one. While Arrington says his investments will never be allowed to influence TechCrunch, I do wonder how readers will see the deal.
Perhaps it will open up tech start-ups in a way that hasn’t been done before. But given the power of a site like TechCrunch to influence the speed with which a new company gets noticed, the publication could face conflicts down the track.
Whatever the case, it does show that the traditional media business model continues to chang in new and exciting ways.
The high Australian dollar is creating massive problems for many sectors of the economy, but not all.
As Martin Joyce writes on Business Spectator, the strong dollar has enticed a tidal wave of top business speakers to travel to Australia in the coming months, including Donald Trump, Richard Branson, economist Harry Dent, Edward De Bono and self-help guru Tim Ferris.
And in an environment when businesses are cautious about spending of any type, a ticket to see a top-flight speaker is the equivalent of the cheap treat that many consumers are treating themselves to.
While not all of the speakers mentioned above might be your cup of tea, the parade of big names is worth checking out – even grabbing a couple of ideas to use in your business will make the price of admission worthwhile.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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