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Electrolux Spin A Yarn But Fail To Address The Real Issues At The Swedish Business

What do you do when your Electrolux and your business is facing a questionable future and you want to avoid answering tough questions, you get your PR manager to set up an interview for your CEO with a tame media organisation, who are in the business of kissing the backside of brands in an effort to get marketing dollars, instead of giving readers the true facts on what is happening in a business that is a key brand in the appliance market.

Following a series of exclusive Electrolux ChannelNews stories during the past year, which senior executives have leaked, because they are fed up with the direction that management are taking the Swedish Company in Australia, their latest CEO Kurt Hegvold seen above third from the left at IFA 2023, has moved to try and put a positive spin on several issues impacting the business that will affect the Companies relationship with retailers who have sold their products in the past.

In an interview with Appliance Retailer that according to SemRush research was down 72% last month to just 9,000 visitors Vs over 598,000 unique visitors to ChannelNews, he failed to address key issues such as why have staff gone from praising the old management team prior to John Featherstone which included the likes of former sales director Michael Doyle and Mike Puck who retired after 35 years to slamming current management over the current direction that the business is heading.

Former CEO John Featherstone, right with axed HR Magager Deb Bowden,

He has refused to answer any of ChannelNews questions regarding the state of the Electrolux business in Australia.This year 75% of staff at their Australian operation claimed that they lacked confidence in the current management and the direction of the business. The information was leaked to ChannelNews.

Many disgruntled employees have turned to ChannelNews claiming that the market needs to know the real facts about the Company that has just eliminated their regional sales operation a move that several current management claims will “significantly impact the Australian operation” who are facing revenues and profit pressures.

Hegvold was the guy who was given a poisoned chalice when he was appointed as the CEO of Electrolux and is now responsible for a business that is under siege after the previous CEO was flicked, under questionable circumstances, the HR manager forced to exit the business, and prior to his appointment the popular sales director, who was standing in as GM and was responsible for growth at the Swedish Company was dumped by the previous CEO because he was seen as a threat, by the newly appointed CEO John Featherstone who was replaced by Hegvold.

This matter ended up in the Federal Court with Electrolux deciding to settle, and the former sales director being paid a large sum of money.

The problem at Electrolux is that they have a shocking PR image with the Company failing to address any of the major issues impacting their Australian operation, with major retailers now looking at new brands to replace brands previously distributed by the Swedish Company.

Hegvold admits that Electrolux global has been forced to simplify its global company structure as we exclusively revealed.

“These changes will merge our European and APAC operations to leverage common synergies, reduce organisational layers and improve our speed of execution,” Hegvold said.

Three months ago, shares in Electrolux (ELUXb.ST) slumped to their lowest since 2011 after Europe’s biggest home appliances maker reported losses in the second quarter as cash-strapped shoppers opted for cheaper products and demand from residential property builders slowed.

The Swedish group said organic sales fell 8% as sales volumes shrank significantly due to continued weak demand.

According to several of their competitors the weakness in the market is still there but this has not stopped archrivals such as BSH Home Appliances Corporation who sell Bosch, Siemens, Gaggenau and Neff appliances in competition with Electrolux reporting record growth.

For the third consecutive year, BSH achieved a record year, generating turnover of 15.9 billion euros in the 2022 fiscal year.

That represented a year-over-year increase of 4.2 percent, with BSH growing its turnover in all regions including Asia Pacic & Australia where their business grew 2%.

During the past year Electrolux who have knocked back a takeover offer from Chinese appliance giant Midea has seen their shares fall over 30%.

Hegvold claims that ANZ remains a critical market within the newly formed region. As such, the current focus on customers and consumers’ needs in the ANZ market remains a constant.”

As a result of these changes, 3,000 roles globally will be impacted with both the removal of roles and establishment of newly created roles.

He claims that while there are many similarities in the new Europe and Asia business model that will benefit ANZ.

He claims that some roles will continue to be based in APAC going forward he has not said whether these are local in Country roles or retained regional roles.

As for several senior staff exits including several senior roles including the sudden exit of Troy Hincho, the former Head of Commercial who is taking up a senior role at Residentia Hegvold claims that the changes affecting the Company has resulted in the business creating several new positions in an effort to streamline operations.

As for the exit of several former managers due to their decision to look for new roles Hegvold said “We don’t take these actions lightly and remain committed to ensuring our valued employees are supported through this time of necessary transition,” Hegvold said.

He also claims that the local business will “Support our current portfolio of brands.

There was no mention of what will happen to Chef, Simpson and Dishlex which already being dumped from their ranging.

Retailers have told ChannelNews that the business is looking to also drop Chef in the hope that they can use their Westinghouse brand to grow lost Chef sales.

“Outwardly, we won’t look different to retailers and consumers through this change. We can be counted on to deliver the brands, products and services that people have trusted for decades. What can be expected is an enhancement to how we work and how we deliver.

“We will continue sharing our plans with our stakeholders across ANZ in a timely and comprehensive manner that will ensure business continuity and the health of our ongoing trusted partnerships.”

ChannelNews has asked Hegvold for comment on several occasions but both he and the Companies PR manager Mark Goodwin has failed to comment on the issues impacting the Company.

We also want to ask him whether he is set to outsource PR and marketing roles to external agencies Vs inhouse employees as part of the cost cutting.



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