It has been reported that Gerry Harvey is planning to revive the defunct Norman Ross chain in New Zealand. The AFR noted that Harvey “plans to use the Norman Ross brand as the name for a new chain of up to 30 discount electrical goods and computer stores in New Zealand”.
Harvey Norman has been a star performer in the last few years, with its share price increasing from $2.50 in September 2005 to hit $5.85 today. Citi Smith Barney has a ‘hold’ on the stock, and is forecasting earnings growth of 18.7% for FY2008.
The revival of the Norman Ross brand in New Zealand is nostalgic to say the least. Harvey, originally a door-to-door vacuum salesman, opened what was his first retail store, called Harvey Norman in 1961 (with long time business partner, Ian Norman). In a bid to expand their fledgling retail empire, Harvey and Norman teamed up with another retailer, Keith Lord shortly after. Neither Lord nor Harvey would allow the new store to be named after the other, so a compromise was struck and the Norman Ross name was created.
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Harvey successfully built Norman Ross into a chain of 42 stores until he and Ian Norman sold their stake in the company to Grace Brothers, who won a bidding war with Bond Corp. (Ironically, Bond Corp had itself only recently sold its 20 percent stake in Grace Brothers to Myer Emporium only months earlier). A mere three weeks later, Bond purchased Norman Ross from Grace Brothers and in his wisdom, thought it best to fire Harvey and Norman.
Bond merged Norman Ross with Waltons to form Waltons Bond. (Waltons Bond was a department store retailer associated with US-based Sears & Roebuck). Sadly for Bond, instead of becoming a cash cow, Waltons was a fiasco, losing $199 million in FY1983. In 1987, Waltons Bond was sold to interests associated with the Cookes family, who turned the remaining stores in Venture outlets. Venture later went bankrupt in 1994.
Harvey and Norman weren’t unemployed for long. Soon after being given their marching orders from Bond, the pair founded Harvey Norman. The category killer, which is effectively run as a franchise went public in 1987 and hasn’t stopped growing since. It is now worth almost $6 billion, while Harvey is a billionaire.
If there is one thing that history has shown, it that you would far rather have your money in a company being run by Gerry Harvey, than one being run by Alan Bond.