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Majap Mahem: 2008 Year In Review

For most, 2008 will be a year best forgotten, and no less so for the major appliances industry.

Indeed, one could argue that the dramatic downturn in majaps, which stemmed from the real estate market meltdown, foreshadowed this fall’s global financial crisis.

If there’s any comfort to be found in that, perhaps the first ones in will be the first ones out. Perhaps. But in the meantime, consumers are reverting to a need vs. want basis for buying white goods as discretionary dollars disappear, while many are even repairing rather than replacing their old, faltering units.

Here’s how it all played out this year.


LG Electronics’ majap unit started the new year off by introducing an enhanced SteamWasher with a high-temperature anti-allergen cycle and increased 4.2-cubic-foot capacity while holding the line on price.


Manufacturers continued to use the International Builders’ Show as a launch platform for new products and lines. At this year’s confab, Whirlpool introduced a Duet steam laundry pair and Maytag Epicz front loader, GE debuted a Profile SmartDispense washer that senses the laundry load and automatically adds the proper amount of water, while Bosch bowed the stackable Axxis laundry pair and front-load Nexxt laundry platform.


Monthly figures from the Association of Home Appliance Manufacturers (AHAM) showed that white-goods shipments plummeted 17 percent in January. Among the hardest-hit sectors was cooking, down 15.6 percent year-over-year. Separately, The NPD Group reported that retail sales of majaps slipped 1.6 percent in 2007 to $25.6 billion.

Elsewhere, LG and GE entered into a cross-licensing agreement that allows the vendors to use each other’s patents for refrigerators and cooking appliances without paying licensing fees. The two companies have collaborated on the development of cooking products and technologies since 1999.


Majap makers seemingly thumbed their noses at the worsening recession and rolled out a wide array of premium, feature-rich products at this year’s Kitchen/Bath Industry Show (K/BIS). Among the highlights were Electrolux’s largest launch ever, including its new Electrolux-branded premium platform, and the K/BIS debut of new Sears majap head Steve Light, who touted the chain’s breadth of top appliance brands.


After years of speculation, GE finally pulled the plug on its appliance division, announcing plans to sell or spin off the unit including its management team. CEO Jeff Immelt described LG as a leading contender to buy the business, but also cited Haier, Turkey’s Arcelik and GE’s Mexican partner Controladora Mabe as possible suitors.

Elsewhere, Whirlpool reported a 24 percent decline in first-quarter earnings and a 72 percent drop in North American operating profit as lower demand and higher oil and raw materials costs took their toll.


White-goods sales for the industry’s 100 largest retailers slipped 0.3 percent in 2007, according to TWICE’s annual Top 100 Major Appliance Retailers Report. In comparison, prior-year growth was 5.6 percent, which itself reflected a 50 percent decline from 2005. No. 1 majap merchant Sears continued to donate share, the report showed, with appliance sales slipping 7.3 percent.


AHAM released its latest majap factory shipments report which showed unit volume down 13 percent in May. The kitchen clean-up category, specifically dishwashers, was among the hardest hit that month, down nearly 11 percent year-over-year.

And in some rare good news, a pre-summer heat wave that baked much of the country in June helped jump-start the stalled room air conditioner market. “The heat kicked in and the sell-through took off,” said Haier VP and home comfort general manager Kurt Kaufhold.


LG retained its lead as the No. 1 brand in front-load laundry, according to the Stevenson Company’s latest TraQline report. The manufacturer, which became the country’s front-load leader in the second quarter of 2007 after only five years in this market, announced the results during its summer line show in New York.

Elsewhere, BSH Home Appliances restructured along product-category lines, creating four senior VP posts to manage its laundry, dishwasher, cooking and refrigeration businesses across its Bosch, Siemens, Thermador and Gaggenau brands.


Despite their steep price premiums, Energy Star-rated appliances are significantly outselling their less efficient counterparts, a recent spate of reports showed. Industry observers believe the trend is being stoked by higher energy prices and a growing concern for the environment.

Elsewhere, TV personality Kelly Ripa joined Electrolux executives in kicking off a charity program built around the brand’s new turquoise-toned laundry pair. Ripa, spokeswoman for the company’s recently-launched 22-SKU premium majap collection, announced a two-year commitment to raise $500,000 to fight ovarian cancer, funded in part by donations from Electrolux.


Sears plans to reassert its appliance supremacy in a new ad campaign built around the “Blue Appliance Crew,” a blue-shirted team of delivery, installation, repair, support and sales personnel who demonstrate the retailer’s white-goods strengths in a series of humorous TV spots. The company is also placing Web terminals in its majap departments to allow consumers to compare competitors’ prices, and is arranging extra training for 12,000 sales and support staff via a multi-vendor truck tour.


AHAM released its latest majap factory shipments report which showed unit volume down nearly 14 percent in October, as the faltering economy and distressed housing market continued to take the wind out of white-goods sales. Cooking and dishwashers were two of the month’s hardest-hit categories, each falling 18.3 percent year-over-year.

Elsewhere, LG offered to make in-home modifications on French door refrigerators that were incorrectly certified as Energy Star compliant, and will compensate consumers for the difference in their energy bills for the life of the appliance under an agreement with the United States Department of Energy.


Sales of major appliances during the Thanksgiving weekend were “remarkably strong,” according to a survey of leading majap dealers by Longbow Research. Some 87 percent of respondents said sales met or exceeded expectations, with laundry the biggest seller by far. Dealers made up for margin losses on deeply discounted goods with robust attachment rates of extended warranties, the survey showed.