Majap Memories: 2011 In Review

By Alan Wolf On Dec 19 2011 - 6:01am




NEW YORK – All in all, 2011 is a year that most appliance retailers and manufacturers would probably prefer to forget.

The category, which is so closely tied to the housing industry, continued to mirror the ongoing malaise in newhome construction and existing stock, forcing retailers to resort to steep promotions and vendors to raise cost prices to buoy diminishing bottom lines.

It remains to be seen whether the appliance industry will continue to follow CE into a downward price spiral, or if next year’s first wave of “smart” energy management majaps can help stem the tide. Until then, we present for your perusal the following highlights and lowlights of 2011.

JANUARY

Maytag Takes Top-Load Lead

Whirlpool’s Maytag-branded Centennial washer and its production line sibling Bravos X are the country’s two best-selling top-load washers this month, The NPD Group reports. High-efficiency top-load washers have become one of the fastest-growing majap categories now that capacity and water and energy consumption are rivaling those of front-load configurations.

FEBRUARY

Buying Groups Foresee 2nd-Half Uptick For Majaps

At their biannual shows this month the nation’s two largest buying groups, Nationwide and BrandSource, forecast moderate gains for majaps in the latter part of the year thanks to firmer MAP enforcement and increased marketing support. But that will follow a tepid first half as dealers face tough year-over-year comparisons to the opening months of 2010, when a federally funded and state-administered rebate program artificially fueled sales.

MARCH

Bilas Leaves GE

In a surprise move, Michael McDermot is tapped to succeed GE Appliances veteran Dave Bilas as head of the manufacturer’s sales organization. Bilas, widely popular within the independent dealer channel, will later assume a new executive VP post at the Nationwide Marketing Group, where he will head all product marketing and merchandising.

APRIL

K/BIS A No-Show For Majaps

The major appliance trade largely takes a pass on this month’s Kitchen/Bath Industry Show (K/BIS). Once the premier showcase for white-goods makers, the event has steadily lost majap industry support over the last four years as high costs, weak sales, low attendance and competitive venues took their toll.

Majap Prices Rise

Manufacturers implement cost increases of between 8 percent and 10 percent on average to offset rising raw materials prices, which have been a drag on earnings. While it remains to be seen whether the price hikes will stick and at what levels, increases generally settle in at about half of what was originally requested, dealers say.

MAY

Walmart Expands Majap Pilot

Walmart rolls out 26 more Appliance Market shops to its flagship stores throughout the Houston and Dallas/ Fort Worth markets. The GE-fulfilled majap sections, which were first piloted in three Walmart stores, range from 700 to 900 square feet and carry between 50 and 80 good-better-best kitchen and laundry models under the Hotpoint, GE and GE Profile badges.

JUNE

Kmart Cuts Majap Staff

Kmart begins cutting its appliance departments’ dedicated sales associates. The discounter pink-slips some 700 appliance employees this month and begins crosstraining remaining store staff instead. The company says the move follows an update of the department’s old Sears-centric point-of-sale system, which no longer requires specialized training.

JULY

Room Air In Short Supply

Consumers find little relief in appliance stores from this month’s triple-digit heat wave in appliance stores, where a combination of supply-chain problems and late-spring heat has kept room air inventory scarce. The problem began earlier this year with a shortage of Chinese-made compressors, and have since been compounded by an early AC selling season in the category’s core Midwest and East Coast markets, buying group executives report.

AUGUST

Q2 Report: Home Depot Up, Lowe’s Less So

No. 3 majap chain The Home Depot reports higher sales and net earnings for its second quarter due to strength in its core categories and a rebound in its seasonal business, while its larger rival Lowe’s says earnings were flat and sales gains slim due to continued macroeconomic weakness.

SEPTEMBER

hhgregg Enters Chicago

hhgregg’s long-awaited entry into the Chicago market begins this month with the opening of its first 14 area stores. The Chicago rollout represents the company’s largest single-market launch to date, and puts the Indianapolis- based CE and majap chain in direct competition with local independents Abt Electronics and Grant’s Appliances while encroaching on Sears Holdings’ hometown turf.

OCTOBER

Commerce Dept. Confirms Majap Price Dumping

The U.S. Department of Commerce issues a preliminary determination that Electrolux, LG Electronics (LGE), Samsung and Mexican OEM Mabe, a GE supplier, sold bottom-mount refrigerators here at dumped prices. According to the finding, which was prompted by a Whirlpool petition in March, the majaps were sold in the U.S at wholesale prices that were lower than those in Mexico and Korea, where the products were produced.

A Q3 To Forget For Whirlpool And Electrolux

Weaker demand and higher raw-materials costs take a toll on the world’s two-largest majap makers. Whirlpool reports that third-quarter operating profit fell nearly 42 percent, to $136 million, and announces plans to cut 10 percent of its North American and European workforce by next year, resulting in the loss of 5,000 jobs.

Similarly, Electrolux’s third-quarter profits fall 40.2 percent, to $128 million, as the company is “tangibly affected by the decline in consumer confidence in the mature markets of North America and Western Europe,” says president/CEO Keith McLoughlin.

NOVEMBER

French Door Fridges Fight On Black Friday

Major appliances hold a prominent place in Black Friday promotional calendars again this year. This time, French-style refrigerators from Whirlpool and Samsung are the footballs of choice, with doorbuster pricing of $1,200 appearing as early as mid-month at Home Depot.

Best Buy Majaps Rebound

Best Buy says operational changes and more competitive offers contributed to a 13.7 percent increase in U.S. major appliance comp sales during its fiscal third quarter, ended Nov. 26. The revitalization, which leverages best practices from the company’s Best Buy Mobile and Pacific Sales businesses, has been gaining traction all year.

Meanwhile, the retailer continues to roll out Pac Sales departments within select stores that serve as a Magnolia A/V equivalent for majaps.

DECEMBER

GE’s Cambell Retiring; Blankeship Takes Over

GE appliance and lighting chief Jim Campbell will retire after 30 years with the company on Dec. 31, to be succeeded in majaps by GE aviation exec Charles “Chip” Blankenship. In his new role as president/CEO of GE Appliances, he is expected to extend the division’s recent entry into home energy-management products and services.

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