Harvey Norman's chief executive officer, Gerry Harvey, is not a happy man. Despite recording strong end of financial year results, Harvey Norman's top brass has raised doubts over its future alliance with Compaq.
The worries follow recent news of Compaq's plans to open retail outlets in Australia. Harvey told ARN he planned to hold meetings with Compaq officials early this week in order to discuss the extent to which Harvey Norman will continue retailing Compaq computers.
When asked if he is reluctant to continue retailing Compaq PCs, Harvey responded: "Show me a retailer who is happy that their manufacturer is becoming its competitor."
Harvey emphasised the widespread effects of Compaq's decision would be felt across the computer retail industry and were not restricted to Harvey Norman.
"It's not just going to affect me - competition is competition. It's going to affect every retailer," he said.
Harvey Norman's annual financial results show the retail giant's computer business grossed $566 million in revenues, a growth of 33 per cent over the same period last year.
But with Harvey Norman slated to open more shopfronts during the next 12-18 months, Compaq's entrance on the retail scene is set to cause the retailer no end of concern.
Central to the concerns appears to be the fact that Harvey Norman received 5 per cent of revenues for fiscal 98-99 directly from PC sales.
Harvey expects to make a definite decision on Compaq in the next couple of weeks.