Inside Harvey Norman: Asset-Heavy Retail in an Online World

Harvey Norman has long been a staple of Australian retail, operating across furniture, white goods and consumer electronics, and has traditionally been viewed as a slower-growth, blue-chip stock. While the company does maintain an online presence, its large, iconic physical stores remain central to its strategy.

That blue-chip character was challenged in 2025, when Harvey Norman reported net profit growth of 47% year-on-year. This result was supported by robust Australian sales, international expansion and property revaluations. It is worth noting, however, that just over 20% of 2025 profit can be attributed to property revaluations — non-cash gains that can be volatile and are not recurring operational earnings.

Unlike many of its competitors, Harvey Norman is not simply a home-retail business. The company benefits from a range of alternative income streams, including franchise fees, property leases, rental income and digital systems. In 2025, HVN earned approximately A$385 million from these “other income” sources, which include rental income. The company also owns a substantial freehold property portfolio valued at around A$4.53 billion — a tangible asset base that many competitors lack. These alternative income streams provide some buffer against the inherently cyclical nature of big-ticket consumer discretionary retail, which is sensitive to interest rates, inflation and consumer sentiment.

International growth has also been a strategic focus. Harvey Norman now has a notable presence in New Zealand, Singapore and Malaysia. In Europe, it operates 16 stores in Ireland, five in Slovenia and three in Croatia, alongside a growing — though still early-stage — footprint in England. The growth potential across parts of Europe and Asia is meaningful if the company can successfully roll out its physical-store model in an increasingly competitive online retail environment.

Harvey Norman also benefits from strong insider ownership, led by co-founder Gerald Harvey’s 35.4% stake. While Harvey has recently sold a small portion of his holdings, these sales amount to less than 1% of his total stake and may simply reflect personal divestment at the age of 86. Between Gerald Harvey and CEO Kay Lesley Page, the leadership team brings nearly 78 years of combined experience with the company — a lifelong connection that underscores continuity and long-term commitment.

Despite the recent surge in profitability, long-term financial growth has been relatively flat compared with competitors such as Amazon, JB Hi-Fi and Kogan. Competitive pressure from online retail remains significant, although Harvey Norman’s focus on large-ticket items may offer some protection, as consumers can be more reluctant to purchase these products online.

At present, by a range of valuation measures, Harvey Norman appears to be fully valued. Nonetheless, it remains an interesting case study: an old-school bricks-and-mortar consumer discretionary retailer that has managed to sustain a growth narrative despite the rise of online retail — one to keep on the watch list.