Blaine Callard, the chief executive of Harvey Norman Ireland, has indicated he is prepared to shut some of the group's 12 stores in the State if "holdout" landlords won't come to agreements with it over reductions in boom-time rents.
"I've always said we are committed to Ireland, but it doesn't mean we are committed to every site," he said in an interview with The Irish Times. The electronics and furniture retailer's like-for-like revenues are growing strongly, at about 5 per cent per annum.
Lawsuit filed
IBRC Assurance Company, the investment arm of the former Anglo Irish Bank, last week filed a High Court lawsuit against Harvey Norman as part of a long-running rent dispute with the group over its outlet in Cork, where IBRC Assurance is the landlord.
IBRC Assurance is on the market through a receivership process being overseen by Grant Thornton accountants, which was unavailable for comment. IBRC, the bank in special liquidation that owns 100 per cent of the assurance company, declined to comment.
Referring to the possible impact of the receivership process for IBRC Assurance on the rent dispute and court case, Mr Callard said: “I hope our difficulty there stems from the fact that there still isn’t clarity over who is dealing with it. If the asset managers won’t engage, then we’ll have a problem.”
‘Sensible’ solution
Harvey Norman, which entered the market in 2003, has sought rent cuts from most of its landlords in recent years. Mr Callard praised Nama, which he said was “willing to come to a sensible accommodation” on sites it controlled.
“It’s just a remaining issue with a couple of landlords. A couple of them are living with their heads in the sand.”
Harvey Norman has been in dispute with IBRC Assurance over the rent at the Cork store since 2009. In 2012, Mr Callard wrote to the then chief executive of IBRC, Mike Aynsley, asking for a rent cut. The banker responded that a rent increase would be more appropriate, prompting Mr Callard to accuse My Aynsley of "breathtaking arrogance".
In 2009 and 2010, several of Harvey Norman’s landlords filed High Court actions against it in rent disputes. Mr Callard said he wants to open new stores in Galway, Dublin.
