The BIG STORY is Out of the Woods. EXCLUSIVE. UPDATED

Fabriano, Italy based Antonio Merloni sells Sweden based ASKO to Slovenia based appliance maker Gorenje.
Why is THIS story worthy of being called the BIG STORY?  

ANALYSIS
Antonio Merloni.
Why didn’t Gorenje buy Antonio Merloni?  Does this mark the end of A. Merloni?  Is this part of a liquidation event for the bankrupt company, a great unwinding, or only a shoring up of finances? 
While ASKO is a brand based on quality and engineering and marketing based on "pull", Antonio Merloni is a brandless OEM supplier making price sensitive products for price finicky corporate buyers, each of whom are happy to chuck you under the bus for a $1 per unit.  All "push". 
This market can no longer be served from Euroland.  It is now generally served by manufacturers in Turkey, China, and well, Slovenia. 
The good news:  Since Antonio Merloni was too incompetent to leverage its ASKO asset, unloading it has no deeper strategic significance.
The bad news:    Antonio Merloni has been a bit incompetent. 
Is this the end of Antonio Merloni?  Not to worry.  We probably missed the end of AM 2 years ago.

Gorenje
Gorenje is building both its branded and its OEM businesses.  ASKO unlocks North American distribution of Gorenje branded products and is a corporate office for OEM sales AND ASKO provides technology to Gorenje for the development of middle and lower end wet products.  Of course this was Antonio Merloni’s strategy, so why will Gorenje do better?  Gorenje will surely learn from the historic train wreck which is Merloni.

ASKO
So what of ASKO?  ASKO USA becomes the keystone of the Gorenje strategy, launching a new "Eurotech" economy brand, or filling out the ASKO line with all sorts of product segments they don’t make.  Will they pull it off?  We’ll see.

Gorenje Press Release

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6 Responses to The BIG STORY is Out of the Woods. EXCLUSIVE. UPDATED

  1. Beloved Advisor!

    Clearly the BIG story is not generating much interest, judging by the severe lack of comments posted regarding it!  I suppose that Asko is not important enough to any of us to even merit a few moments on the keyboard……

    If this truly is the BIG story (and not one inserted in lieu of a BIG story that never materialized) then we are disappointed.  We were hoping for Home Depot to exit the appliance business or for Dacor to purchase GE appliances or Abt to buy Best Buy or, well you get the idea…..

    • Dear Mr. Appliancecarguy,

      This is not Louisville falling into a sink hole, not Viking being burnt to the ground by actual Swedes, or Sub-Zero freezing over.  It is not many things, but it is more than a secondary story in that it signals the virtual end of Antonio Merloni and the introduction of future Juggernaut Gorenje.

      It may not be obvious, but the table is set for the rapid development of a full line upper middle brand to joust with BSH here in North America. 
      Yes as Ariston did and failed. 
      Yes as Arcelik promised and has yet to begin. 
      This time for sure.

    • I think the lack of excitement revolves more around the critical condition of the business. People are tired of hearing rumor this, rumor that. It now is about survival and certainly it is very difficult for me to see so many wonderful organizations and people suffer so much. We can blame people and decisions but it really comes down to the economy and supply and demand. Remember , without this latest bailout , we have a deep depression, probably worse than ’29. I wish all those I worked with the very best in their business, especially Dacor and the Josephs.
  2. Appliance Magazine reported on August 9, that Antonio Merloni has reached agreement to sell its Ukraine factory to Electrolux for 19 million Euros.  The Ukraine factory was Merloni’s Hail Mary pass to salvation, a low cost foothold to replace the high cost of Fabriano, Italy.  News of the deal comes only 2 weeks after the sale of ASKO to Gorenje.  What is left of AM?  Perhaps nothing.  Perhaps a gaping empty plant in Fabriano, and empty parking spaces.  Perhaps it’s still working a bit…..who can know.  Seems obvious though, that after bankruptcy, and the sale of these two assets, the end is near.

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