Harvey Norman has lost an appeal regarding an earlier court ruling that the furniture retailer made false and misleading financial claims in an advertising campaign.
The Federal Court on Thursday dismissed the appeal, which was lodged by Harvey Norman and Latitude Finance Australia last November. Reasons for the decision, however, will be published on a later date.
Last October, the court ruled against Harvey Norman and Latitude following legal proceedings brought by the Australian Securities and Investments Commission (Asic).
According to Asic, the retailer ran a national advertising campaign from January 2020 to August 2021, which offered a 60-month interest-free and no-deposit payment method. However, customers were required to take out a credit card, such as the Latitude Go Mastercard, to purchase goods.
Justice Yates found that consumers had to enter into a “fundamentally different” financial arrangement than the one promoted, as a credit card comes with an establishment fee and monthly account service fees. Asic intended to seek relief, including pecuniary penalties against the defendants, following the trial.
In light of the court’s latest decision, a separate hearing will be scheduled to determine any penalties to be imposed on Harvey Norman and Latitude.
Sales and profit boost
The furniture retailer has reported a strong uplift in profitability and sales for the year ended June 30, driven by positive performance across its segments.
Reported profit before tax for the year rose 39 per cent to $753.10 million, while profit after tax and non-controlling interests grew 47 per cent to $518.02 million.
By segment, franchising operations recorded a 25 per cent uplift in profit before tax, driven by a 6.1 per cent rise in aggregated franchisee sales revenue. The property segment saw profit double, supported by higher net property revaluation.
At the overseas company-operated retail segment, profit increased 18 per cent, with a decline in New Zealand more than offset by growth in Ireland and Asia.
Total system sales revenue for the year was $9.3 billion, representing a 5.5 per cent increase.
“The FY25 result is a testament to the strength of our diversified business model and the disciplined execution of our long-term strategy,” said chairman Gerry Harvey.
“We’ve delivered solid growth across all core segments, driven by strong franchisee performance, the resilience of our property portfolio, our measured global expansion, and continued investment in digital transformation and in-store innovation,” he added.
This article was first published on sibling website Inside Retail.
