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Majap Memories: 2011 In Review


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


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.


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.


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.


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.


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.


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.


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.


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


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


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.


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.


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.