The Year In Majaps: A White-Goods Retrospective


When the big book of major appliances is eventually written, 2005 will likely loom large as one of the most tumultuous years in the industry's history.

Aside from the No. 1 news item — the pending merger of Whirlpool and Maytag — the white-goods business was also beset by soft sales, increased globalization, killer hurricanes, growing market-share shifts between retail channels and relentless profit pressures as the cost of raw materials continues to rise.


Home Depot Adds LG Line: The Home Depot adds LG Electronics to its majap vendor matrix and begins selling a 15-piece assortment of LG-branded laundry pairs, refrigerators, dishwashers, air conditioners and microwave ovens late in the second quarter. Lowe's soon follows suit by adding Samsung.

Innovation Emphasized At Builders Show: In an effort to lure more want-in rather than wear-out appliance shoppers — as well as a means to justify recent across-the-board price hikes — majap makers place an ever greater emphasis on innovation at the International Builders Show, held at the Orange County Convention Center in Orlando, Fla. Chief among the highlights was Sharp's superheated steam oven, which uses a combination of steam, heat and superheated steam to drain away fat from food.


Nationwide Upbeat On '05: The Nationwide Marketing Group celebrates its 2004 performance and sets the new year planning during its Prime Time! event in Florida. President/director Ed Kelly says major appliances — the $8 billion buying group's largest product category — has had a “good six weeks” during the start of 2005, and that price increases for most appliances were “more in the 10 percent area than 5 percent.”


MARTA Sets '05 Strategies: The MARTA Cooperative of America celebrates a strong 2004 and discusses industry conditions, merchandising and membership changes during its annual winter meeting in Orlando, Fla. Executive director Warren Mann describes 2004 as “the best year since I have been here [1999],” with the buying group up 9 percent in white goods, buoyed by a 16 percent increase in Electrolux/Frigidaire sales, and a 30 percent spike in LG volume.

H.H. Gregg Opens Its Books: H.H. Gregg, now formerly Gregg Appliances, offers an unprecedented glimpse into its inner workings with the first-ever public release of its quarterly results under its new owners. Among the highlights: The multiregional brown- and white-goods chain will open its second and third Fine Lines concept stores for super-premium majaps, and will expand into the Charlotte, N.C., market with three stores and a regional distribution center.


Best Buy Rolling Out New White-Goods Strategy: Building on recent gains in the major appliances category, Best Buy begins rolling out a new majap strategy that calls for an expanded product assortment and enhanced sales training. The No. 4 white-goods merchant also begins retrofitting its appliance departments with new lifestyle-vignette merchandising displays.


K/BIS Finds Majap Biz In Flux: Never before has the major appliance business been in such flux, as industrywide sales plateau and globalization and the growing predominance of the home improvement channel radically alter the playing field. Thus was the backdrop for this month's Kitchen/Bath Industry Show, held in Las Vegas, where top of mind for many attendees was Maytag, whose dramatic sales, earning and market share declines were of particular concern to dealers.


Maytag Deal Gets Mixed Reviews: Maytag's planned $2.1 billion buyout by a private investor group led by Ripplewood Holdings garners mixed reactions from industry observers. While most applaud the new lease on life for the struggling manufacturer, others question whether Maytag will remain a going concern. But the company is also talking to a second potential bidder that includes the largest majap maker in China, Haier.


Haier Out, Whirlpool In: Haier drops its bid for Maytag in the wake of a surprise $1.33 billion offer from Whirlpool to acquire the ailing appliance giant. The proposal also sparks speculation that Electrolux may now throw its hat in the ring. And still on the table is the initial $1.13 billion all-cash acquisition agreement with Ripplewood Holdings, which is backed by Maytag's board.


Consumer Survey: Independents Better For Majaps: Mom-and-pop appliance stores, which are typically known for service, offers good prices and a better selection of appliances than nationwide chains, says a report in next month's Consumer Reports. The survey also shows that none of the major retailers that were rated out-priced the independents.


Retail Havoc In Katrina's Path: Hundreds of retail stores in Louisiana, Mississippi and Alabama that carry major appliances remain closed in the aftermath of Hurricane Katrina, including the two Gulf Coast locations of industry icon Cowboy Maloney's Electric City.

BrandSource Unveils Gourmet Source: With BrandSource's executive director Bob Lawrence proclaiming 2005 as “the best year we have had in 11 years,” the buying group emphasizes its accomplishments and launches a new high-end appliance division dubbed Gourmet Source during its annual national convention at the Paris Hotel.


Whirlpool-Maytag Merger Moves Closer: Whirlpool's pending acquisition of Maytag moves closer to possible completion with the buyer's filing of a prospectus and a proposed proxy statement for Maytag shareholders with the Securities and Exchange Commission. Described as “an important milestone” by Whirlpool's CEO Jeff Fettig, the filing also shows that Maytag anticipates $550 million in higher raw materials costs this year.


H.H. Gregg Hands Off Repair Biz: H.H. Gregg is exiting the repair business. In an effort to focus on its core retail competencies, the regional majap powerhouse is outsourcing its product service and repair operations to national and regional product service providers including GE. Gregg will pay GE $21.5 million to assume all product service obligations under extended service plans sold by the retail chain.


Whirlpool, Maytag Reschedule Vote: Whirlpool and Maytag move back the shareholder vote date for their proposed merger from Dec. 16 to Dec. 22 to give stockholders time to receive and review definitive proxy statements and prospectuses. The companies have also agreed not to close the deal before Feb. 27 to give the Justice Department additional time for review.


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