NATM's White-Goods Business Is Busting Out All Over
By Alan Wolf -- TWICE, 3/27/2006
Hollywood, Fla. — White goods are on a roll for the NATM Buying Corp., which enjoyed a 10 percent increase in unit sales of majaps year-to-date and a 20 percent increase in dollar volume.
“We saw solid growth in every appliance category,” said Bill Trawick, president and executive director of the $3.6 billion buying group, which held its annual meeting here at the Westin Diplomat Resort last week.
The calendar year has also gotten off to a solid start, he reported, with majap dollar volume up 25 percent in January and February, and unit sales ahead between 15 percent and 16 percent for the two months. And March, he added, “is coming in very strong for us.”
Specifically, NATM's GE dollar volume was up 28 percent through February; Frigidaire business was up 39 percent; and Whirlpool came in slightly below that.
Margins are also holding their own. “We have a pretty good mix,” Trawick said, noting that NATM's dollar volume is outpacing unit volume 2-to-1, a reflection of the group's emphasis on better goods.
Recently, NATM's 12 dealers, which include some of the nation's largest white- and brown-goods regional chains, have been enjoying added lift from front-load laundry, particularly the new, aggressively priced line from GE. “It's an absolute home run for us,” Trawick said.
NATM's core majap suppliers remain Whirlpool, GE and Frigidaire, although the group may consider adding LG to the roster due to its growing role with at least seven individual members. “There's a lot of interest in LG,” Trawick noted. “Home Depot's done a pretty good job with it, too.”
Currently, the group's split of white goods to CE remains fixed at 45 percent to 55 percent.
Turning to the industry at large, Trawick weighed in on a range of key majap issues:
Price increases: “All manufacturers got price increases last year,” he said. “NATM dealers gave up a little margin in order to compete with the national chains, which didn't pass them along to consumers. We're putting pressure on vendors to not raise prices again this year.”
Sears' eroding share: “Sears is a tired brand. It's old; it's your grandmother's company. Kids don't shop there. And the Kenmore brand is becoming tired too. I don't know how they turn it around. Putting appliances in Kmart isn't working. They have some issues over there.”
Whirlpool's Maytag merger: “We support it, and it was just cleared by the Competition Bureau of Canada. It's not anti-competitive because there are lots of vendor options out there. If the deal doesn't happen, though, I don't know what happens to Maytag. Lots of folks have already left there because they were expecting the merger to be completed by February.”
The independent channel: “We're surviving quite well and opening new stores, and no one's gone out of business in the last 10 years. If you think about it, 20 years ago when many of the regionals went under, they didn't have national competitors. It was due to other regionals. The nationals are tougher, but it's a different type of competition. The appliance side of our business gives us an edge in getting and keeping customers.”
Industry outlook: “Interest rates are rising but they're still historically low. Analysts are predicting a softer second half in 2006, but we're still pretty confident.”
No related content found.
VIEW ALL GALLERIES