In Australia we have a number of traditions. The long weekend, a sausage sizzle at Bunnings and the latest – the whinging billionaire. The leaders of this pack of privileged complainers has to be Gerry Harvey who in the past two weeks has suggested that his stock in the grip of an evil an unidentified cabal of evil short sellers and that Amazon should be banned from coming to Australia. These short sellers are apparently akin to a secret society who have in tow numerous journalists all of whom conspire together to do him some form of harm. The interesting thing about making statements about short sellers is that it is easy to track short selling since it is reported daily by the ASX and can be found here. As you can see HVN comes in at about number 23 in the list of companies with outstanding short sales. You will also note the the percentage of stock held by short sellers is 0.43% of the issued capital – not the 4% reported here. What fascinates me is that if HVN is under attack by short sellers they are doing a really bad job of it and might want to think about a career change. If you had invested $1.00 into HVN two years ago it would now be worth about $1.69 – if you had short sold the stock you would be in a world of hurt.
As to the notion of banning Amazon from coming to Australia this requires a little bit of context and HVN’s aversion to online shopping does seem to have a deep history. I seem to remember some years ago they trumpeted that HVN had moved online. What they had done was put a pdf version of the catalogue they stuff into your letter box on a website and called that online shopping. Amazon does present a unique threat to Australian retailers for two simple reasons – pricing and service. Australian retailers have for years gotten very wealthy by doing very little and this capacity to charge excessively extends across all retail sectors. You only need to read this blog for a week and you soon realise that I am a car nut, I childishly change cars regularly. As such, I am keenly aware of the pricing differential between cars locally and overseas. The most depressing thing I can do when travelling overseas is to visit a Porsche dealership and ask how much a brand new Porsche Carrera 4 will set me back. For those who dont know the drive away price in the US is around $93K. Locally the same car will set me back somewhere north of $320K – a staggering and wholly unjustified differential. Much has been written about the pricing of cars locally and you get all sorts of reasons as to why. Generally you get the old chestnuts, distance and small market. Intriguingly Porsche are prone to bouts of Teutonic honesty and in the last piece I read which looked at why they charged so much more for their cars locally than overseas the answer was simple – because they can. And it is here we get to the nub of the problem with retailing in Australia – it doesn’t take much to do very well and anything that disrupts this gravy train is viewed with extraordinary hostility and appeals to government to do something about the big bad foreigners.
As to service, I am writing this on a keyboard I coincidentally bought from a HVN store less than an hour earlier. You could have fired a cannon in the store and not hit one of their sales people – they appeared to all be playing with a new set of Bluetooth speakers that had hit the showroom floor. I should be thankful if I had gone into JBH I would have been confronted by the same lack of interest but it would have been dressed up as a hipster wanker or some peanut who thought that a bright purple mohawk was the height of fashion.
I will drop dead in seat the moment I hear an Australian retailer of let alone any Australian billionaire say – we dont need government to do our business for us, thats our job…..bring on the competition. But my guess is that the chances of that happening are near zero and in the meantime we wait gleefully for the arrival of Amazons local distribution hub.