Nardi will become the first widely available mid-market appliance brand to be sold through a pro forma model, Appliance Retailer can today reveal.

Otherwise known as an ‘agency system’, the pro forma model means the retailer conducting the sale does not actually process the transaction — the consumer is purchasing directly from the supplier and the retailer is paid a commission, rather than a margin for the sale.

The pro forma system was devised by the late Miele Australia general manager Peter Murphy, who implemented it to enormous success for the German company’s local subsidiary in the early 2000s. Since then, a number of brands have either launched with a pro forma arrangement or switched to that model. These include ASKO, De Dietrich, Gaggenau and Electrolux’s AEG brand.

The one thing these brands have in common is participation at the premium end of the appliance brand ladder. The pro forma model is thought to work best at this level because enormous investments in brand-building have reduced the need for retailers to compete on price.

Although it will be competing more with brands such as Beko, Blanco and Whirlpool, the pro forma model appeals to Nardi because it will protect its brand and its agency retailers from drastic price erosion.

Experienced MD launches the ‘Westinghouse of Italy’
(Comment; 1 June 2013)

In the concrete jungle business park opposite Silverwater Jail, Shane McNulty is making a new home for his new appliance adventure. He has taken up residence in spare rooms at Bush Australia — it has an enormous head office — and from these new digs McNulty is launching Nardi Elettrodomestici, the latest overseas brand to hit Australia.

McNulty’s connection to Bush Australia is through Jim Parissis, currently the marketing manager for Bush, Blaupunkt and iLuv. The pair worked together at Hagemeyer, in the pre-Shriro days, when Parissis marketed JVC and McNulty was the general manager of the old Major Electronic Appliances (MEA) team that oversaw Omega and Blanco, before Mark Bilton, Hagemeyer’s last CEO, replaced him with Gavan McKenna.

The Milan-based Nardi has historically been a significant OEM partner for Blanco, which despite the German heritage, was for a large part actually Italian-made. Even though Nardi had a presence in the Australian market, the company had wanted to come to Australian in its own name for a long time and had been hounding McNulty to lead up an Australian subsidiary.

“Now is the time for Nardi!” McNulty exclaimed, before laying out a firm foundation for its plans. The family-owned manufacturer plans on assembling all 50 of its Australian SKUs in Italy so that it can genuinely trade off its Italian-ness. There will be cookers and cooktops and rangehoods, but no refrigeration or laundry appliances. Dishwashing is a ‘maybe’.

McNulty is most excited about Nardi’s 54-centimetre range, which he thinks can break up the Westinghouse/Chef duopoly in the rental market, while there is also a multi-coloured range for customers looking for some style in their kitchen.

With the range finalised, McNulty hit the road to find retailers for this range. He tells an interesting story from this experience, one that we are hearing more often from suppliers and retailers.

One of the major retail chains loved the range and the affordable Italian proposition but they did not want to be one of several launch partners — they wanted exclusivity. And not just for the launch period — this retailer wanted five years.

McNulty declined. Nardi has a longterm vision for Australia, he said, and he wants broad coverage across several retail brands.

Had McNulty accepted, this exclusive deal would have mirrored the Narta/Beko alliance. The benefits of such agreements include closer attention in the relationship, less competition between retailers, smaller cataloguing and advertising costs and some ability to legally ward off price erosion.

The negatives include narrow exposure, a significant reliance on a separate company for your business’ success and artificial limits on your sales potential. As the marketing manager of a well-known brand told me recently, “If your brand is strong and attractive, consumers will expect to walk into any store to purchase it”.

To make it a strong and attractive brand, McNulty is going to mine Nardi’s family-owned, 55-year history for all it is worth. There is talk of Milanese feasts to launch the brand and AC Milan players being flown in on a jolly; it already has a domino cooktop in the green/white/red of the Italian flag.

The plan isn’t to compete with Smeg or ILVE or the premium German brands, but with the affordable brands presenting a cheap pretence of foreign elegance.

“Why would people buy fake Italian when they can buy real Italian?” is his sales pitch.