THE COSTS ARE CLEAR; HIGHER MATERIAL PRICES CONTINUE TO TAKE THEIR TOLL.
NEW YORK-Though some home vendors have ridden the wave that came from consumers' surge in home buying this past year, a number of housewares vendors struggled with higher costs for materials and increased shipping costs as petroleum prices continue to rise.
Given those challenges, for some housewares companies, selling assets became a business strategy, but for others, adding assets made more sense. Overall, vendors who sell big-ticket items like appliances appear to have benefited the most from the strong housing market in 2004.
Whirlpool racked up $8.3 billion in sales, a nearly 5 percent increase over 2003, and that's before it adds Maytag, which ranked fourth among the top 10 vendors with $3.9 billion in sales for 2004, a 2.7 percent decrease from the prior year. It was the belle of the ball this summer as a host of firms, including Chinese appliance supplier Haier, engaged in a bidding war for the company.
The small appliances segment also saw some excitement in Jarden's $323 million in 2004 sales, a 40.1 percent jump over 2003.
Jarden has been on a shopping spree. In January, it grabbed a larger stake in the small appliances arena with the acquisition of American Household, landing brands such as Sunbeam, Mr. Coffee and Coleman. Jarden then snagged The Holmes Group -- and more brands: Rival, Bionaire and a Chinese factory -- for $625 million.
1 Whirlpool (2003: 1)
Products: Major, small appliances
2004: $8,254; 2003: $7,875; % Change: 4.8%
The white-goods giant is also a presence in housewares with KitchenAid small appliances and cookware, and Whirlpool home comfort. Its portfolio will grow next year with the Maytag acquisition. Proving that it doesn't get any easier at the top, the biggest home furnishings company raised prices last year by 5 to 10 percent due to what it called "an unprecedented material costs environment." On the positive side, the KitchenAid division continues to be a design leader and its Pro Line series of small and major appliances is well-placed at retail.
2 General Electric (2003: 2)
Products: Major appliances
2004: $6,470.5; 2003: $6,051; % Change: 6.9%
General Electric is getting noticed for its recent innovations, including faux stainless steel, which repels fingerprints and can hold those beloved magnets. Its Monogram line features a fridge with wood-paneled doors for about $5,399. A computerized wine vault holds 975 bottles and retails for about $30,000. Undercounter refrigerator drawers are $1,500 to $2,500. The company shifted production of its higher-priced refrigerators from Bloomington, Ind., to a plant in Celaya, Mexico.
3 Maytag (2003: 4)
Products: Major appliances
2004: $3,918.7; 2003: $4,027.1; % Change: -2.7%
This is Maytag's last appearance on our list (barring some regulatory shocker). Despite Hoover's well-publicized problems, the brand is among the most respected, and the vac industry once again is humming. But whether floor care fits into Whirlpool's plans is anyone's guess.
4 AB Electrolux (2003: 2)
Products: Major appliances, floor care
2004: $3,144.6; 2003: $2,879.9; % Change: 9.2%
The world's largest appliance maker -- at least until Whirlpool adds Maytag -- resorted to a two-brand strategy in floor care by complementing the Eureka lineup with a high-end Electrolux series. Small appliances sold in Europe aren't part of the near-term plans for this country, though an air purifier is available.This Swedish giant logged strong sales for major appliances and its floor care business improved, as the company focused on building the Electrolux brand in North America. The company cited "bad timing" as the reason it chose this year not to exhibit at the International Home & Housewares Show, a decision it will revisit for 2006, said John Case, who joined Electrolux Home Care Products as president in October.
5 Newell Rubbermaid (2003: 3)
Products: Housewares, cookware
2004: $2,613.6; 2003: $2,772.5; % Change: -5.7%
Skyrocketing raw-material prices are behind the evolution at Newell Rubbermaid, which recently announced its second major restructuring plan under Chief Executive Officer Joseph Galli. The company plans to cut 5,000 employees and close one-third of its 80 manufacturing facilities as part of a three-year plan called Project Acceleration, which will result in expense reductions of $120 million over three years. The company is looking to invest in Office Products, Tools and Hardware, Rubbermaid Commercial Products, Rubbermaid Foodservice Products, Premium Kitchen Care -- home of the Calphalon brand -- and Juvenile Products divisions. Last year, it revamped its Rubbermaid Home Products Division and has exited many low-performing categories, paring away nearly 100,000 SKUs.
6 Conair Corp. (2003: 5)
Products: Small appliances, personal care
2004: $1,085.5; 2003: $999.6; % Change: 8.6%
Cuisinart, one of Conair's kitchen appliance lines (the other is Waring Pro) continues to add to its lineup of countertop cooking appliances. Recent introductions bring a sleek, stainless steel look to new waffle makers, ice cream makers and other products. The Waring Pro line appeals to the serious cook and added new coffeemakers, blenders and toasters. On the personal care side of the business, Conair acquired the Scunci hair accessories business.
7 Bissell Inc. (2003: 9)
Products: Floor care
2004: $700; 2003: $538; % Change: 30.1%
The oldest floor-care maker has only had a full line of offerings for less than a decade, but has managed to firmly establish itself as a market leader. Beyond its historic strength in deep cleaning, it has introduced impactful products such as the Little Green, Lift-Off upright-canister combination and now the SpotBot automated stain remover. A regular on the HFN Top 50 Vendors list, Bissell's retail base is primarily the mass market and continues to be well represented in the opening-price-point range at Wal-Mart.
8 Nacco Housewares Group (2003: 8)
Products: Small appliances
2004: $614.8; 2003: $598.7; % Change: 2.7%
The Nacco Housewares Group is the parent of Hamilton Beach/Proctor-Silex, which added new colors to its Eclectrics line of kitchen appliances, including the on-trend shade, turquoise, at the most recent Housewares Show. The company's Brew Station, a coffeemaker that brews a full pot but dispenses single servings, was an innovation that received wide placement at retail. And the company has moved into the home comfort arena with its True Air brand of air purifiers and humidifiers.
9 The Holmes Group (2003: 10)
Products: Small appliances
2004: $585.3; 2003: $521.6; % Change: 12.2%
After years of speculation that the company was up for sale, The Holmes Group finally agreed to be acquired by Jarden Corp. for $625 million, consisting of approximately $420 million in cash and 4.1 million shares of Jarden common stock. The deal brings attractive brands like Rival and Bionaire, launching Jarden into the home comfort category as well as wider international markets. Holmes, which owns its own manufacturing plant in China, where it makes small appliances and home comfort products, is in sound financial shape, analysts said.
10 Salton Inc. (2003: 7)
Products: Small appliances, personal care, home comfort
2004: $531.5; 2003: $620.1; % Change: -14.3%
Faced with rising costs and lower domestic sales, Salton executives have been busy. The company sold off its tabletop division to Lifetime Brands and its 52.6 percent stake in Amalgamated Appliance Holdings Ltd. to a group of investors for $80 million in past September. The company also recently completed a private debt swap that largely relieved the 2005 debt burden.
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|Title Annotation:||GE Appliances, Maytag Corp., Whirlpool Corp.; appliance industry sales|
|Comment:||THE COSTS ARE CLEAR; HIGHER MATERIAL PRICES CONTINUE TO TAKE THEIR TOLL.(GE Appliances, Maytag Corp., Whirlpool Corp.)(appliance industry sales)|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Oct 17, 2005|
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