Big New Zealand whiteware exporter Fisher & Paykel Appliances has raised its prices in the United States by 6 per cent as it joins a range of major appliance manufacturers covering increased costs for materials like steel and certain plastics.
The New York Times reports that appliance makers – ranging from big names including GE, Maytag and Whirlpool to boutique companies such as Sub-Zero and New Zealand’s Fisher & Paykel – have quietly put through price rises of 2 to 10 per cent in recent months.
It described Fisher & Paykel, as “a New Zealand company with a cult following in the United States” which was holding firm on the higher recommended retail prices it issued last month.
Bryce Wells, the company’s marketing manager in the United States, said consumers appreciated the appliances’ lavish stainless steel “skins” because the material conveyed “a perception of durability and style”.
But the newspaper reported that the style came at a cost: “the suggested price for its hulking stainless steel DCS brand Professional Dual Fuel Range is $US6479, ($NZ9187) up from $US6109 last year”.
Fisher & Paykel Appliances, which is listed on the New Zealand Exchange (NZX) and has a large plant near Mosgiel, 17km west of Dunedin, this month blamed fierce competition from Asian home appliance manufacturers, along with high steel prices and the strong kiwi dollar, for its third profit downgrade in six months.
Shares in the whiteware company fell more than 12 per cent earlier this month on the news it expected an after-tax profit of between $63 million and $68 million for the March year, 14 per cent lower than the previous guidance. Investors were apparently spooked by news the company’s Australasian sales had taken a hit.
In November, the company downgraded its full-year profit forecast to $75 million to $78 million from $83.5 million the previous year, citing “incredible” price hikes for steel and plastic.
The company’s overall unit sales volume increased by 2.6 per cent over a nine month period, with sales in the United States up 50 per cent and up 46.9 per cent in the rest of the world.
Other manufacturers selling in the United States have cited the increased cost of materials and said they had no choice but to raise prices, the newspaper reported.
Everyone in the industry was “getting whacked”, according to Steve Duthie, a spokesman for Whirlpool, which announced a 5 to 10 per cent increase in suggested retail prices for all of its goods last month.
Another “boutique” manufacturer, Sub-Zero’s lifted the price of its model 632 fridge, for example, with over a cubic metre of storage space and a big expanse of stainless steel, to $US6270, compared with $US6000 last year, a 4.5 per cent increase.
Michele Bedard, the marketing director at Sub-Zero in Madison, Wisconsin said the price lift was not overly aggressive “compared to how dramatic the situation is in the shortage of stainless steel”.
Some analysts blamed quickly industrialising China, which is consuming vast amounts of steel. High oil prices, the weak US dollar and the escalating value of the euro were other factors.
From Stuff.co.nz
