Gerry Harvey calls for a little help from above

GERRY HARVEY is banking on divine intervention to keep cashed-up shoppers flooding into his stores.

GERRY HARVEY is banking on divine intervention to keep cashed-up shoppers flooding into his stores.

The co-founder and chairman of Harvey Norman is confident the heavens will deliver, as signs emerge that consumer confidence is rising.

The retailer reported a 4.1 per cent jump in overall sales across Australia in January, with global sales up 3.8 per cent.

This followed six months of weak sales and falling property values, which drove net profit down 36.5 per cent to $81.9 million in the six months to December 31.

Despite the fall, Harvey Norman shares were up 21¢, or 9.21 per cent, at $2.49 on Thursday as the company was more optimistic about its outlook.

Asked what he planned to do to sustain the bumper sales numbers, Mr Harvey said: "Pray."

"It might have more affect than anything else," he said.

Excluding the effect of new stores and store closures, Harvey Norman sales fell 5.3 per cent in the period.

Mr Harvey could not pinpoint why there had been such a turnaround in overall sales in the new year but said he was encouraged by the renewed optimism. "Consumer confidence levels have risen recently and, because of that, you've now got weekly sales in January and February exceeding last year," he said.

"For the first time we've got sale increases for such a long time. It's encouraging that you've just gone [up] two months in a row."

Less encouraging were electronics and technology, which the company said were "challenged" by deflationary headwinds that had affected margins.

Mr Harvey admitted the categories were causing problems but said he had no plans to get rid of them and focus solely on homemaker products.

"We're still persevering in turning them around. We're living in hope and confidence that that'll happen."

Mr Harvey said the retailer expected online sales in technology could account for 2 per cent of total sales this year, "but in the other areas it'll be next to nothing".

He said he expected margin pressures to ease as more retailers shut up shop due to tough trading conditions. "You've had so many retailers go out of business in the last couple of years and there's probably more to go."

The company closed nine stores and opened six new stores in the six months to December.

Harvey Norman declared a fully franked interim dividend of 4.5¢ a share, down from 5¢.

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