Harvey Norman's acquisition of a stake in a dairy farm may be mystifying for some, but not for executive chairman Gerry Harvey.
The homewares retailer has agreed to pay $34 million for a 49.9 per cent stake in Victorian dairy company Coomboona which owns land and farm assets in northern Victoria's Goulburn Valley. The business includes dairy farm operations, along with a pedigree breeding and genetics division.
Harvey Norman gave no explanation for its interest in Coomboona in its ASX notice.
But billionaire Gerry Harvey told The Australian that the investment reflected the tough times in the retailing sector.
"You have got to look around to try to find out where you can put your money and try and make some money. It's not that bloody easy," Mr Harvey said.
He said that if Harvey Norman was not making money out of retailing, it would put its money into something else, and other non-retailing investments were under consideration.
Morningstar analyst Farina Parsons said the acquisition was small, but odd.
"It (the dairy farm) has got nothing to do with what they (Harvey Norman) do," Ms Parsons said.
"Maybe Gerry (Harvey) wants to become the next Wesfarmers.
"It's very odd."
Diversified conglomerate Wesfarmers operates Coles supermarkets, and businesses including office supplies, home improvement, insurance, resources, chemicals, energy and fertilisers.
Perhaps Mr Harvey was seeking to capitalise on China's growing demand for dairy products, but dairy prices are currently low, Ms Parsons said.
"To be honest, I don't know why Gerry is going there," she said.
Mr Harvey was listed at 20 on the BRW Rich 200 List for 2015, with an estimated fortune of $1.79 billion.
He also has extensive horse-racing and breeding interests.
Harvey Norman last week said its annual net profit for fiscal 2015 rose 26.6 per cent to $268.1 million, partly boosted by property revaluations.
Shares in Harvey Norman closed 14 cents, or 3.25 per cent, lower at $4.17.
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