Harvey Norman to shut Rick Hart stores

Harvey Norman says it will close three of its Rick Hart stores in Western Australia after posting a 1.7 per cent increase in global sales for the year to June 30, earning $6.18 billion.

The electronics, furniture and whitegoods retailer announced today it would close seven of its underperforming Clive Peeters and Rick Hart shops, while a further 16 Rick Hart or Clive Peeters stores will be rebranded as Harvey Norman or Joyce Mayne.

The closures would result in a charge against next year's pre-tax profit of $10 million, it said.

The retailer has been hit by sharp falls in spending by consumers and said price falls would hit revenue in the coming year.

Like-for-like sales for the year decreased by 3.6 per cent compared to last year.

Global sales were negatively affected by currency depreciation, including a 3.8 per cent fall in the New Zealand dollar, a 12.3 per cent slump in the Euro and a 10.0 per cent deterioration in the UK pound, the company said.

Total sales in Australia, the company's biggest market, rose by 3.3 per cent.

However like for like sales in Australia fell by 2.8 per cent.

Elsewhere total sales and like for like sales rose at Harvey Norman stores in Slovenia and Northern Island, but fell in Ireland and New Zealand.

The company said furniture and bedding franchisees had increased revenue and market share despite a slowdown in the industry.

However revenue had fallen for electrical franchisees due to a challenging environment, including a stronger Australian dollar and falling TV prices.

There had been growth in white goods, cooking, home appliances and floor care.

Shares in Harvey Norman jumped 13.5 cents, or 7.5 per cent, to $1.935 by 1215 AEST.