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Windmere alliance with Salton/Maxim to create synergies.

MIAMI LAKES, Fla.--Windmere Corp. and Salton/Maxim Housewares are planning a strategic alliance to take advantage of each other's strengths in distribution and give Windmere an expanded assortment of products for its private label business.

Windmere, a manufacturer of personal care and kitchen appliances sold largely through mass merchants and drug stores, has agreed to buy a 50 percent stake in Salton/Maxim, a kitchen appliance supplier mainly to department stores.

Windmere is offering 748,112 shares of its stock, a $10.8 million note and $3.3 million in cash for about 6.5 million shares of common stock that Salton will issue. Salton has about 6.5 million shares outstanding.

The deal is scheduled to close in June.

Salton also last week licensed the White Westinghouse name from Frigidaire for small kitchen appliances. The licensing pact further sweetens the deal, potentially giving Windmere another kitchen electrics brand to manufacture.

Windmere has been producing many of Salton's products for about 15 years in its Durable manufacturing facility in Hong Kong, said Barbara Friedson Garrett, executive vice president of sales and marketing for Windmere.

Salton also sells products that Windmere's plant does not make. The companies said last week they expect Windmere eventually to make most of Salton/Maxim's product line. The deal could give Windmere access to Salton products, increasing the assortment Windmere could offer to private label customers.

In addition to marketing products under its own name, Windmere does a substantial private label business. It is also an OEM supplier to several major small appliance firms.

Salton/Maxim currently distributes products under the Salton, Maxim, and Salton Time names. The firm also distributes the Breadman, Juiceman and Popeil Pasta Maker.

"The deal brings us product expansion potential into all of the step-up products Salton/Maxim makes," Garrett said. "It brings us distribution into market niches we don't have, such as department stores. This also gives us products to make that we weren't in already. Long-term, almost everything [Salton markets] will be brought into Durable."

Salton/Maxim, meanwhile, gets additional capital to fuel growth, said Leon Dreimann, chief executive. Salton also hopes to make inroads into more mass merchants and drug stores, areas where Windmere is strong.

"The deal strengthens our balance sheet and allows us to continue growing our business," Dreimann said. "It provides us with additional capital for strategic acquisitions. It also gives us the ability to broaden our distribution for accounts that we currently don't have."

He added that Salton's distribution also should grow with the firm's new license, White Westinghouse. He said Salton plans to have two lines of White Westinghouse brand goods, one for department stores and one for mass merchants and other accounts, including drug stores.

In a related matter, Windmere disclosed a restructuring plan to better deal with its growth plans, Garrett said. The firm will integrate its sales, marketing, manufacturing and product development processes under a new holding company, Windmere-Durable Holdings Inc.

Windmere's sales for the year were $187.8 million. Salton/Maxim reported sales for the 26 weeks ended Dec. 30, 1995 of $59.7 million.
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Author:Bernard, Sharyn
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Mar 4, 1996
Words:517
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