Electrolux Australia who appointed a “Piece of Mind” Director last year appear to have not been able to stop the rampant decline in the Swedish appliance makers global fortunes with the business reporting another big loss in the fourth quarter.
After ChannelNews exclusively revealed that the parent Company was cutting out their Asia Pacific operation, which the local operation reported to in an effort to cut costs, while also slashing their product range it’s now been revealed that the world’s second largest appliance maker’s fourth-quarter loss had widened from a year earlier due to high costs, intensified price competition and weak demand in key markets including Australia and the USA sending its shares lower.
In the Qantas lounge on the way back from CES the big question among competitors and retailers was ‘how long will it before Chinese appliance giant Midea makes another takeover offer.
The Swedish group is due to publish its full quarterly earnings report on Feb.3rd Australian time, with losses tipped to have ballooned out to A$466 million for the last three months.
The result includes non-recurring items of a net negative 2.5 billion crowns, mainly restructuring costs which Electrolux in October estimated at 2 billion-2.5 billion crowns.
In the USA like in Australia consumers are switching to other brands such as Haier and in the USA which accounts for around a third of the group’s sales, Electrolux saw underlying losses grow to 1.4 billion crowns in the fourth quarter from 1.2 billion a year earlier.
When times get tough how about appointing Carlo Gadola new director, Peace of Mind for Australia and New Zealand.
“The main driver behind the loss in the USA was intensified price pressure and weak demand during Black Friday, as well as the remainder of the year,” it said in a statement.
The Company is also struggling to hold onto share in the premium market as brands such as Fisher & Paykel, take share away from Electrolux in the premium market.
Electrolux, who had been punting on price rises due to inflation delivering better margins were hurt when Chinese competitors moved to slash prices with Electrolux unable to move due to their mounting losses.
The group has struggled to compete with lower-end rivals such as China’s Midea alongside market leader Whirlpool.
This quarter the business is under pressure to lower prices as cash-strapped consumers opt for cheaper goods.
Shares in the company closed 5% lower, taking a year-to-date drop to 9%.
