Noel Leeming flatly denies sale to Harvey Norman
- 17 October, 2007 21:00
The country’s largest consumer electronics retailer, Noel Leeming, has refuted claims it is up for sale to rival chain, Australian-based Harvey Norman.
According to a recent story by Australian Financial Review (AFR), a sister publication of Reseller News, Harvey Norman Holdings was assessing a potential A$300 million (NZ$340 million) acquisition of the Noel Leeming Group.
However, a spokesperson for Noel Leeming, who declined to be named, denied the company was being acquired, claiming rumours about a sale were coming from recent Australian entrant to the local market, JB Hi-Fi.
“JB Hi-Fi has opened three stores in New Zealand and [chief executive] Richard Uechtritz is trying to portray them as the knight in shining armour coming in to save retail here. I think they are trying to get more positive PR.”
In response, Uechtritz says the acquisition rumours are not coming from within JB Hi-Fi.
“I don’t really have any comment to make on those statements, but I’m not sure where they [Noel Leeming] get the idea of a knight in shining armour – as far as I’m concerned we’re another retailer providing a service.”
But, Uechtritz says if the rumoured deal was true, it would be of no benefit to the New Zealand consumer and small IT business owner.
“It would give Harvey Norman an unfair advantage in the computer market and I think the Commerce Commission would block such a deal.”
The AFR report also states that if an acquisition went ahead it could run into problems with the Commerce Commission, as the combined chain could make up as much as 52 percent of the local retail market.
The Noel Leeming Group, which incorporates the Bond and Bond brand, has 80 stores in New Zealand, while Harvey Norman has 26 here and 174 in Australia.
The AFR wrote that Noel Leeming’s Australian owner Gresham Private Equity has also tested the interest of two other Australian companies, Woolworths and JB Hi-Fi, as buyers in the past few weeks.
The newspaper says Gresham Private Equity managing director Roy McKelvie denied a formal sale process is underway, but that it would sell if the price was right.
“If someone came along and offered a big price we would then look at selling it,” he was reported as saying.
Meanwhile, Harvey Norman chief executive chairman Gerry Harvey did state in the company’s recent annual report that it was “investigating other retail opportunities in the New Zealand market”.