Maytag Stores Now Number 50

By Alan Wolf & Lisa Cervini -- TWICE, 9/26/2005

Denver— Despite the distraction of a possible merger with Whirpool, Maytag has been pressing ahead with it Maytag Store retail franchise.

The chain, whose turnkey units are independently owned and operated, now numbers 50 locations nationwide — with six in and around the Denver market alone — following the recent opening of its newest store, here.

The retail stores carry Maytag's full brand roster of kitchen, laundry and floor-care products, and with their boutique-style format, soft-colored walls, wide aisles and children's activity areas, are clearly meant to appeal to consumers' senses. To that end, Maytag has been selecting real estate within destination shopping centers where adjacencies include such home-oriented retailers as Bed Bath & Beyond, Crate & Barrel and Pottery Barn.

Inside, the 4,000-square-foot to 7,000-square-foot stores boast a “try it first” atmosphere that enables consumers to take a washer for a spin to see how well it works, or lets them test whether their cookware will fit inside a three-rack dishwasher. The largest units can display as many as 200 models, and feature working kitchens and live products for demonstrations and consumer tryouts.

The Maytag Stores are an outgrowth of the company's 37-year-old Home Appliance Centers, the 1,000-to- 2,000-square-foot shops run by service technicians in predominantly rural and secondary markets.

Maytag May Shut Plants

Newton, Iowa — Maytag may close additional manufacturing facilities in an attempt to rein in the high cost of its manufacturing overhead.

Noting that excess manufacturing capacity remains one of the biggest issues impacting Maytag's earnings, chairman/CEO Ralph Hake said in a prepared statement that “We intend to address this issue.”

“The actions we take might require restructuring charges, including asset write-offs, accelerated depreciation and certain cash costs,” he continued. “These actions will need to be undertaken irrespective of the pending merger with Whirlpool.”

Higher costs were also attributed to increasing distribution and fuel expenses and rising raw material prices, all of which are negatively impacting financial performance, the company said.

In addition to cost increases, unfavorable product pricing/mix, primarily in floor care, continues to adversely impact results, as will “significant merger and acquisition expenses,” Maytag said.

But despite the cost increases and the uncertainty surrounding its sale, the company achieved high single-digit sales growth in its majap product lines through the first two months of the third quarter, Hake reported.

Maytag expects to announce its third quarter 2005 sales and earnings results on Oct. 21.

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