UPDATED: Fisher & Paykel's Stocks Crash, Seeking Large Stake Investors

ALL UPDATES ARE AT BOTTOM
Which is the worst news; that Fisher & Paykel's stocks crashed 35% today or that 35% of stock value was equal to 35 cents NZ?
Fisher & Paykel closed at $1NZ on Friday, and $0.65NZ on Monday.
The explanations given are these:

• lots of inventory
• lots of expensive foreign currency debt while the NZ$ fell 26% in the last 6 months
• sales in New Zealand and North America fell 13% in 10 months
• sales in Europe fell 19% in 10 months
• sales in Australia fell 9% in 10 months

Whatever the % North American sales represented by Lowes, it is certainly not reflected in the sales drop numbers reported above, but may be reflected in the Fisher & Paykel statement below:

Bloomberg Reported:
"The North American market is in “severe decline,” Auckland-based Fisher & Paykel said today. “With intense market competition continuing and competitors fighting to retain sales volumes, margins have been put under pressure.” "

What else was reported:

• The Clyde, OH laundry factory will be closed.  The market will be supplied from Thailand.  A factory just spun up to speed in 2005 when production was shifted from New Zealand.  We imagine the tooling still has the shipping labels on it.
• The budget ELBA brand will be sold through Sears.  ELBA was acquired in 2006.
  Note:  Sources tell us that the DeLonghi brand (manufactured by ELBA) will continue through its current distribution channel.
• Executives will take a 5% pay cut.  Salaried staff will also take a 1 day cut per month

Finally:

Fisher & Paykel is in search of a strategic partnership; a significant investment of a size and type Fisher and Paykel is not willing at this time to discusss.  New Zealand's BusinessDay.com reported that F&P President John Bongard said:

"We have been talking to a number of potential strategic partners - I can't tell you who, obviously for good sound commercial reasons.  As yet the size of any strategic or cornerstone stake - although we've got some ideas on it - we wouldn't be sharing that at the moment."

A few thoughts from Advisor:

• In light of this recent news, the laying off of 71 employees in North America which we reported on February 6, seems less the bad sportsmanship that we all suspected, and more the panicked evacuation of Saigon.
• Could our report from February 6th have sparked the decline?  Nahh, we didn't think so either.
• Who might end up dangling a lifeline to F&P?
  • New Zealand and Australian governments?  After all the production moves offshore, what's the point of that?
  • LATE UPDATE:  NZ PM says prepared to help F&P stay out of wrong hands.
  • Whirlpool.  Some problems of their own, yes?
  • Our ApplianceAdvisor.com's patron saint Randy Rummel could jump up to buy back DCS?  Nice story, but unlikely.

Is there room in the market for Fisher & Paykel?  We'll be watching.

UPDATE:  February 17
The Ohio News Messenger Newspaper reported that Fisher & Paykel is closing the Clyde, OH dryer plant in July 2009 and shifting all the tooling to Mexico.  The Washer plant will be mothballed in June 2009 in hopes that it might one day start again.  The Clyde, OH motor plant will remain running.  The Clyde facilities employed 128 people in late 2007, now employs 86, but 60 will be laid off by summer's end......leaving 26.

UPDATE:  February 17
The New Zealand Herald reports that Whirlpool has stated it has no interest in acquiring F&P.  Several analysts reached for comment suggested that F&P and its $1/2 billion NZ debt is not an interesting investment vehicle, and that because of all the out-sourcing a government bailout is less likely.  The Herald further reported: 

While many are reluctant to openly criticise the board and management of one of New Zealand's most iconic companies, there is talk that the firm has made poor decisions in the past year on its debt position.  "No one wants to bag these guys, but they have known for a long time that they needed to raise capital," said one commentator.  He said the board and management needed to change.