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Harvey Norman: "buy.com has no future"

Harvey Norman: "buy.com has no future"

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Gerry Harvey has dismissed buy.com as a serious force in the Australian retail space, just weeks after its much-hyped official launch.

The dismissal comes as buy.com turned heads in the channel early this week with advertisements in national papers comparing Harvey Norman's and buy.com's prices for the same consumer products.

The advertisements displayed savings of around $200 from buy.com and were accompanied by the tag line "spot the rip off".

The strategy has raised questions about the possible impact on IT distributor Tech Pacific now that it's new third party products business reportedly supports the likes of estore, ubid in addition to buy.com. The problem of allowing etailers to undercut traditional resellers was an issue Dataflow grappled with recently in its deal with smartbuy.com.au.

"They [Tech Pacific] are obviously going to have a very sour relationship with Harvey Norman and every other customer they've got," Harvey commented.

Meanwhile, the man atop Harvey Norman refuses to acknowledge buy.com is a viable business. When asked for his response to the buy.com salvo Harvey told ARN he is not concerned by what he called a "massive money loser" in the US.

According to buy.com's financial results for Q2 released on April 24, net loss for the quarter was $US32.8 million, compared with a net loss of $19.3 million in the first quarter last year.

The company did, however, boast revenue growth of 92 per cent to $207.6 million for the first quarter over last year's effort of $107.9 million in the same quarter.

"There's no future for them," he said. "The fact that they've opened here is a massive mistake."

Harvey said he considered David Jones a more worthy competitor, and will not be drawn on price competition with the etail model he believes has got "all the fundamentals wrong". "I've just got to pretend [buy.com] doesn't exist."

Buy.com's chief executive, Richard Baillie, was unable to comment yesterday. Tech Pacific was also unavailable. Update and responses to follow.


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