Tough Times, Tough Decisions for F&P

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    Bermuda Bob

    I honestly hate it when some of my predictions seem to come to fruition, either in full or part …

    Unfortunately, there are multiple reports of Fisher & Paykel taking what’s called an "impairment charge" of $70M to $75M against their North American business … previously valued @ $119.5M … representing almost 60% of their value … and thereby adversely affecting the future of DCS …

    Here’s a link to the morbid news:

    While DCS will probably be the bargain it was in 2004 when it sold for $30M to $33M the question needs to be openly pondered as to who would be interested in a brand which is essentially the same as it was in 2004 (you’ll recall my earlier comments on how badly F&P squandered the DCS brand) except for a few minor adaptations …

    Kinda reminds you of that old adage " … the more things change, the more they stay the same …" eh ???

    On the other hand, with Geely of China (supported by "local government") buying Volvo, would Haier be interested in DCS … and if not, who else might be a willing suitor ???

    The times they are a changin’ … really ???


    Never like to hear that an appliance manufacturer is struggling but there is no surprise here. With the economy the way it is, there are going to be casualties and if DCS were to disappear they won’t be the last either. Still, it is a shame when they were so viable in the late nineties and early in this century. Of course, F & P made a very strategic error when they instantly cancelled all DCS distributors—-I don’t think the brand ever recovered from that. Lack of investment, advertising and new products just hastened the inevitable. Rumour has it that the North American management of F & P may also soon be changing. Have you heard any more about this, advisor?

    Bermuda Bob

    CarGuy, you said a mouthful !!!

    ALMO put DCS on the map and did an absolutely wonderful job of doing so until the Brockway-Moran bled DCS dry to fund their expansion of Gold’s Gyms … F&P thought they could put up where ALMO left off and do the same job … they were sorely mistaken !!!

    As far as the rumour … so you heard the same thing too., eh ???

    The Advisor

    No, I have heard nothing on this rumor.
    Before confirming a rumor though it’s always good to test the basics.
    Is the rumor plausible?: In business a change is always plausible, and business has been bad.
    Is the source plausibly in the know?: This rumor is too high up for the likes of us to be in on the rumor.

    So with a new owner, an evident collapse in demand, and other actions which are not aligned with going gangbusters, a change would not entirely be a surprise, though it’s not expected.

    Appliance Stallion
    When this investor bought DCS they had no idea how to strategically manage high end appliances. They never cared about the business , overpaid for it and then…because of their misguidance had a revolving Presidential door.Investors use money to benefit themselves. That is why most of them are Wall Street types.They lost $29 million on the DCS deal yet profited over $50 million on Gold’s Gym so why would they care about the shape they left that product line in ? The key to the high end business which I can speak to very well is the passion that private ownership brings that business. Let us hope that not everyone of these good companies sell out to Wall Street types. Then for sure the business will go to China or Africa if they could get the people to work for next to nothing.Almo did put DCS on the map and as far as I was concerned were in the top three distributors nationwide.
    Bermuda Bob

    Rumours are just conjecture until they are verified for their accuracy, volition, and intent … and should not be repeated until they are … that’s why I did not include it except to acknowledge hearing it !!!

    Bermuda Bob

    Very often Pro-Style (or high end, as you call it) products come to the consumer via recommendations from Architects, Designers, etc. … it is the wonderful exception (for the sales associate) when a customer comes in knowing what they are looking for and why !!!

    ALMO has always been a class act … I continue to wish them nothing but success with Capital & Liebherr … and the other lines they handle !!!

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