Fisher & Paykel Buys DCS effects and summary

Effective October 11:  Fisher & Paykel buys DCS for US$33 million from Brockway-Moran & Partners and the original founders......which include Randy Rummel (who returned to helm DCS exactly 1 year ago).  Press Release
See (Sep 2004) below for our pre-confirmed rumor-based analysis of what was about to happen then.

Some Thoughts:

• Brockway Moran bought DCS at the top of the market in October 2000, and we believe that they are using the recent unloading of their much larger investment in Gold's Gym to cover (up?) the losses they will recognize with a DCS sale.  We at ApplianceAdvisor have found great amusement in Brockway's foray into major appliances, and are frankly sorry to see them go.
• Rumor has it that the DCS 2-step distribution will not be jettisoned until January 1, 2005.  If true, this is thoughtful of F&P, but is it wise?  Time will tell.
• If our own email is any indication, Fisher's decision to begin sales to Lowes has greatly annoyed many in DCS's current dealer network.
• UPDATE: It has been reported to us that all DCS parts distributors received there 90 day cancellation notices October 12.
• UPDATE: Pres Randy Rummell, VP of Sales Tom Caulfield, CFO Jeff Elder exited the company Oct 12. (fate of others unknown)
• UPDATE: It has been reported to us that at least one distributor (finished goods) will be canceled week 2 of January of 2005
• UPDATE CORRECTION:  Finished Goods Suppliers were given 30 day cancellation notices.
• UPDATE:  BBQ Distributors were given 30 day cancellation notices.  This is a head scratcher since the poor F&P salesperson will not and cannot be expected to visit all the far flung non-appliance BBQ outlets while also visiting all the non-F&P DCS dealers while also visiting their regular F&P dealers while also learning about all the new DCS products.  Will hearth dealers want to talk to the salesguy they never met, selling one brand?  Is this a mistake tipping the scales towards huge?  What's the plan here?
• UPDATE:  BBQs to be sold under the brand "DCS by Fisher & Paykel"
• UPDATE:  DCS will exit the Commercial (restaurant) cooking business, but will support parts and warranty requirements.  At this time no buyer for the line has been identified.
• UPDATE RUMOR:  F&P will sell DCS through Lowes, though it would be more surprising if they did not.

Keep the tips coming

DCS Related Distributor Collapse and Rebuilding: effects and summary

• UPDATE:  As expected, every DCS distributor is Power Dating every feasible DCS replacement.  One key distributor concern is the capacity of these smaller brands to produce to DCS levels.  No brand so far discussed can replace the DCS production capacity nationally.  Do any of these brands have the capacity to support ALMO, the jewel?  We imagine that at these smaller brands, crazy talk is flying of massive step-function growth, investment, joint ventures, financing, offshore production and hiring. How could there not be?  We hope that they are careful not to let this incredible opportunity put them out of business.
• UPDATE:  Frigidaire has canceled its myriad of 2-step distributors ending long term relationships with one swing of the ax. ALMO, and possibly one or two others will be taking over this decidedly low margin, no value-add warehousing and fulfillment end of the business but not the sales promotion glamour end which we believe will be taken over by Frigidaire itself.
• OFFER FROM Diva de Provence (maker of appliances for the peeled-grapes class)
  In response to the Advisor's concern that some of the smaller brands may not have the capacity to step into DCS's shoes:
  Diva de Provence has observed the plight of many distributors. Any distributor looking for a unique, technically advanced, growing line of induction cooking products, should contact Diva's Mng Dir. Amir Girgis, at 888.852.8604 x23.  He assures us that Diva's facilities in France can more than handle the capacity requirements of North America.
• UPDATE:  ALMO is said to have had meetings with Miele and BSH.