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Over the past week, Fisher & Paykel has experienced some unfortunate downtrends to which they have blamed the depressed market conditions worldwide, as well as weak US Sales … this weaker-than-expected performance has reportedly breached a covenant with their banking syndicate, coupled with an expressed intention to attempt to reduce debt guidance by as much as $200M by the end of the 1st quarter of 2010, has caused a 12% downturn in their stock, representing the largest one-day decline since February …
F&P, as you will recall brought in Haier to the tune of 20% to raise capital, but it was obviously not enough … so F&P has embarked on an interesting attempt to raise capital by establishing a manufacturing venue in Reynosa, Mexico … and even more recently entering into a "lease-back" scenario where they leased back their manufacturing facility as well as their head office facilities … raising $53M !!!
F&P has commented that by divesting themselves of their properties, they can more throughly devote their efforts to the core products …
So, draw your own conclusions, but it makes one wonder out loud if, with F&P only getting 25% closer to meeting that $200M, might they be considering a divestiture of some of their holdings which are non-performing ???
I’ll bet you can’t guess who I’m thinking about !!!
They are, and have been for the last year, trying to sell their finance arm. It’s a decent size firm and services a lot of the retailer debt in New Zealand so is prone to market conditions and needed a capital injection recently.
The Renoysa plant was set up before they got into trouble (as was Thailand), it probably hurt them a bit going into the recession since they had to build up stock levels for it and then try and clear the built up inventory into a weak market.
Bermuda Bob,
First and foremost, I hope you are doing well!!
I have been an avid reader of this website, and have often agreed with what you said. My question is what do you think will happen with this company. As a dealer in the Chicago suburbs. DCS is a non brand here, or for at least customers I have dealt with, I heard more of them when Almo had the line. My question to you or others is, is this the same throughout the country? Or just here? Also what about Fisher Paykel, are you or other readers finding them being a non brand as well? Since the Cabrio, it has been an easy sell off, again wondering if its the same elsewhere. Does this brand have a future in our market or other markets, I guess that is my question or looking for an opinion. I feel like they have made their kitchen line(F&P), so Urban Loft like, that it misses the rest of the country,and because DCS is a non brand, nobody asking for it, minimial advertising, minimial feature benefit except for a 48" with 5 burners and a bigger griddle, that there is not a lot to talk about. Their representation in our market has been pretty bad as well, but again that could just be here. Again, just looking for an opinion.
We have been seeing the same thing. Decent product with decent support but no name to carry the product. Agreed, the new cooking products are one of those "once a year" sales in most markets. I am not sure why they would have dumped so much money into a line which won’t be mainstream. Cabrio’s and now the new GE top loads make the Fisher and Paykel laundry a tough sale, especially since they dropped their warranty. Sad to say, I don’t think it is a brand that would be missed if it went away. A lot of people put a lot of work into both brands but a combination of mis-management and a tough economy could end their run. With them moving most or all of their production out of the US I guess it doesn’t matter if consumers continue to reject the brand. They left the American people down by eliminating their jobs….
Being faire and equitable, today it was announced that F&P’s banking syndicate has agreed to waive those budget performance covenant tests which went along with it’s restructuring of it’s debt in May, 2009 …
In place are a 90 day series of performance reviews (testing) which they hope will do the trick via inventory reduction and improved sales next year … that means they will owe $235M by 4-30-2010 and $290M by 4-30-2012 …
Unfortunately, North American revenue is expected to be down 12% due to increased competition and/or the depressed marketplace … and … they are expected to continue to divest themselves of some $40M in facilities …
No mention of what Haier thinks of all this !!!
First, thanks for the sentiments … I’m coming along well, according to my Docs … I’ve truly had to learn to pace myself !!!
I wrote about F&P’s acquisition of DCS before under the same subject line as I used here … I came to more conclusions than I’ll go into here …
I agree with you wholeheartedly that DCS was best off being handled by ALMO, who I have always said, put them on the map !!!
Essentially the only products which I favour outright are the DishDrawers & their gas CookTop (which I own myself !!!) …
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