Retail giant Harvey Norman has been forced to defend its move into dairy farming following investor backlash against its $34 million investment in Coomboona Holdings.
Harvey Norman announced the acquisition of a 49.9% interest in Coomboona Holdings on the Australian Securities Exchange yesterday.
The ASX announcement reveals the retailer acquired the 49.9% shareholdings in Coomboona for $25 million and will also pay an advance of $9 million.
Cooomboona owns land and farm assets in the Coomboona district of the Goulburn Valley retention in northern Victoria and the business includes dairy farm operations and a pedigree breeding and genetics division.
Allan Goldin, of the Australian Shareholders Association told Fairfax the move was “weird”.
“This a retailer of appliances and homewares – what are they doing buying a dairy farm?” he said.
Harvey Norman chairman Gerry Harvey has invested in rural areas before personally, particularly in the racing sector, but this is the first time Harvey Norman has invested.
SmartCompany contacted Harvey for comment but he failed to respond prior to publication.
It’s an unusual move but that has never bothered Harvey who is no stranger to controversy.
Here are a few of his more colourful comments:
Back in 2008 Harvey didn’t hold much hope for online retail, telling SmartCompany online is a “complete waste of time”.
“I’ve got an online part of my business, but I definitely would not put more into it. That’d be a recipe for a disaster,” he said.
“Online people do not make any money. The whole world was conned with online retailing. People say I’m a dinosaur, and I’ve had people coming to me with sites and saying, ‘Oh, look at this, they have 10,000 or 20,000 hits!’ – but it’s a con, a complete con.”
Harvey has had an ongoing rivalry with online retailer Ruslan Kogan and has described Kogan as “a con”.
“When he says he’s cheaper, if he is, it’s very marginal and sometimes he’s dearer – but it’s all unbranded shit, it’s not the quality product,” Harvey said.
Harvey was so enamored with the tax breaks outlined in this year’s federal government budget that he quipped “I wrote the budget and Joe Hockey read it”.
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
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