IT IS a simple case of 'if you can't beat them, join them'.   

Retail giant Harvey Norman, which has long complained about the rise of international online shopping, last night began selling computer games via a website in Ireland that lets Australian consumers avoid GST.

Chairman Gerry Harvey said the company had launched the initiative reluctantly. ''We are not doing this with a great deal of joy. We have been able to do this for a long time, we have held off,'' he said. ''But you get to a point where you can't hold off.''


The electronics giant's ''direct import'' website sells Xbox, Nintendo and PlayStation video games at a significantly lower price than store-bought items.

Mr Harvey conceded the website would cannibalise video game sales from the company's bricks and mortar stores. ''The prices are miles cheaper than what we sell them at the moment,'' he said. ''If people want to buy the games in our stores they can. They will pay a much higher price.''

The move coincided with another day of carnage in the retail sector, with outdoor clothing and equipment company Kathmandu joining a growing list of high-profile names that have had their share prices savaged after revealing trading and profit slumps.   

Kathmandu said strong sales growth reported just last month had stalled, with chief executive Peter Halkett saying weak consumer spending meant pre-Christmas trading had been below expectations.

Investors reacted savagely, slashing the company's share price from $1.65 to $1.23 - a drop of more than 25 per cent. It came days after shares in Billabong plummeted more than 30 per cent after the surf retailer forecast a decline in revenue.

At the close of trade yesterday, Billabong shares were down almost 80 per cent from their highest level this year.

The shares of several other big retailers - David Jones, Myer, Harvey Norman and JB Hi-Fi - were off more than 40 per cent from their year-high prices.

But in a glimmer of hope for retailers, a new survey has suggested the household savings binge that has hurt spending growth is starting to ease. The Melbourne Institute said about 45 per cent of households saved some of their income this month, down from 47 per cent in September.

Overall, the institute's index of household financial conditions deteriorated in December to 27.5, about 15 per cent lower than it was a year ago.

Mr Harvey, announcing Harvey Norman's move to online overseas shopping, said he had not spoken to the Australian Taxation Office about the company's new venture. ''There is no problem with the ATO, we haven't had a discussion but I don't see why we would,'' Mr Harvey said.

The company has sought legal advice to ensure the plan meets Australian requirements. All purchases on the site are GST-free as long as they don't exceed $1000.

The company's general manager for computers and communications, Ben McIntosh, said gamers had insisted on the new initiative.

''The Australian market and the consumers have been absolutely demanding global pricing and lower prices,'' Mr McIntosh said.   

''We stand by this as a great new feature of the Australian market, and it's very, very exciting, we are going to absolutely rip up the Australian prices of computer games.''

The website is owned and operated by Harvey Norman Trading Ireland. ''Our Irish entity is the one that is making the offers to the customer and they will be invoicing the customer, therefore the customer is direct importing the game on their own behalf,'' Mr McIntosh said.

Mr Harvey said the Irish entity was a ''completely different'' company to Harvey Norman Australia.

He said the ''direct import'' website could soon offer customers other products. The company had been contemplating the online initiative for 12 months.

The Australian Productivity Commission announcement that it would take another six months to investigate the GST threshold of online purchases had sped up the company's decision, Mr Harvey said.

''Why should an offshore retailer be able to evade duty, evade GST, evade even more importantly all the on costs retailers have, the biggest ones are wages, advertising and rent?,'' he said. ''We will be just the same as any of those companies overseas

Read more: http://www.theage.com.au/national/harvey-norman-joins-web-stampede-20111222-1p7cb.html#ixzz1hIHguYuP

if it is anything like harvey normals last attempt at a website it will be abysmal.

and funny how the items he is now selling offshore and online are still much cheaper even if GST were added. For months now Ive been making the point that the difference between offshore and onshore prices is not the 10% GST but is usully in the 30-50% range. simply adding GST to the costs of imported goods will make no difference to the number of sales. and its alreadsy been stated by customs that the cost of imposing GST on under $1000 imports is higher than the amount collected. I dont know what the answer is, but it certianly isnt adding gst!

Of course Mr Harvey and people like him can not beat them, as they don't want to cut their prices.  Fair and reasonable prices Mr Harvey.  Fair and reasonable prices.   

Dnarever wrote on Dec 23^rd, 2011 at 7:41am:


Not to mention the shareholders greed and landlords greed which is the big elephant in the room that old Gerry doesn't want to talk about

Why do you have this burning hatred of Gerry Harvey Lastnail?

He seems a decent enough bloke to me.

I don't buy from his stores but I am not that bothered by him.

Andrei.Hicks wrote on Dec 23^rd, 2011 at 11:12am:


You just don't see the ulterior motive do you and that is to penalise and inconvenience anyone who buys online !!

Nothing decent about that

Sir lastnail wrote on Dec 23^rd, 2011 at 11:16am:



But if its not happening to you, why give a sh*t?

Look after your own houseblock and let others get ripped off if they want.

I couldn't give a monkey's toss for other people.

Andrei.Hicks wrote on Dec 23^rd, 2011 at 11:18am:


If he changes the rules and gets GST put on online goods under $1000 then I care don't you ??

Sounds like you got shares in old Harvey What are they trading at now LOL