Gerry Harvey warns e-tailers

Retailer Gerry Harvey used an appearance on the Nine Network's Business Sunday program to take a spray at e-tailing. As the committed bricks-and-mortar man acknowledged his own foray into online sales had performed "not as well as I would have hoped" he expects it will improve, "but it's still not going to be big".

But the warning was directed to the startup e-tailers. The Harvey Norman boss said that some e-tailers are spending $100,000 a month on advertising, while their sales are not much more than that.

Harvey said the major difficulty being faced by the online retailers is the cost of establishing a brand, and that is what will cause them to go out of business.

He claimed that in 80 per cent of cases, in five years, they still won't be profitable, and e-tailing will account for only 5 per cent of total retail sales.

Copyright © 2000 IDG Communications, Inc.

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