Amid a challenging retail landscape that has seen the collapse of major players like Catch, Harris Technology (ASX: HT8) has been treading water with its retail tech business but unearthed a rapidly firing refurbished tech business that is poised to breakout in 2025.
For the December 2024 quarter, Harris Technology reported sales revenue of $3.6 million, with a net positive operating cashflow of $183k. A key driver of this performance has been the Company’s focus on refurbished technology products, a category that has consistently delivered better margins despite a broader industry downturn. This segment has now completed 12 months of operation, and its success is prompting Harris Technology to scale it further in the coming year.
CEO Garrison Huang highlighted the significance of this strategy: “Despite the difficult retail trading conditions persisting through 2024, the year was a transformational one for Harris Technology. We have seen sustained growth in our refurbished tech business, which we look forward to scaling up further in 2025.”
Prudence in a turbulent retail sector
Harris Technology’s focus on disciplined inventory and cash management has been pivotal in navigating the tough retail environment which has been most heavily impacted by cost-of-living pressures amid high interest rates. Subsequently, Harris Technology scaled back its inventory of bulky tech products back in 2022 when the interest rate rises began.
This prudent approach contrasts starkly with the fate of Catch, the online retail giant acquired by Wesfarmers in 2019 for $230 million. Struggling to compete with global discount juggernauts like Temu, Shein, and Amazon, Catch recently announced its closure, cutting 190 jobs with many retailers having struggled substantially over the past 18 months. Other notable collapses include ASX-listed retail peer Mosaic Brands which entered voluntary administration in October 2024 and Myer’s (ASX: MYR) merger with Premier Brands to combine resources to cut losses.
The closure underscores the pressures Australian retailers face from international competitors, who benefit from global scale, lower tax obligations, and reduced labour costs.
Strategic pivot to Refurbished tech
Harris Technology’s success in this environment stems from its ability to identify and focus on high-margin opportunities thanks to a network of manufacturer and vendor relationships established over their past 35 years operating as a major tech retailer in Australia, including periods owned by Coles Myer and Officeworks.
While its Household products category has performed well in recent years during a pullback in spending on new tech products, the Company is now scaling back inventory in this area to allocate resources toward its refurbished tech division – low cost alternatives to new products that function perfectly well.
As an authorised reseller of furbished tech products on all major online marketplaces, Harris Technology has been capitalising on its presence across the likes of Amazon (98% positive feedback from 925 reviews) and eBay (97.7% positive feedback from 5,319 reviews) over the past 12 months to be a sought-after retailer for Refurbished tech products which garner excellent customer reviews.
Emily Maxwell is a business writer at The Sentiment with interest in the tech, fintech and retail industries.
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