On a recent visit to Australia to officially launch Speed Queen into retail via distributor 131 WASHER, Michael D Schoeb, president and CEO of US-based parent company Alliance Laundry Systems, spoke with Appliance Retailer editor Patrick Avenell about the brand, American manufacturing and going pro forma.

Michael D Schoeb from Alliance Laundry Systems.
Michael D Schoeb from Alliance Laundry Systems.

Tell me about the Speed Queen story?

It’s a great story and it’s over 100 years old — it was 1908 when it was founded. The brand is well known, it is the dominant brand, I think, worldwide.

What we do is commercial laundry — so we have a consumer side — but it’s actually commercial product that we sell through the consumer channel. And what we have seen has been a dramatic uptake. Just in the last year-and-a-half, we put another expansion onto our plant because we couldn’t stamp any more metal to get the product around the world. We thought that expansion would last 5-to-7 years but we are basically running out in less than two years — and these expansions cost around US $50 million.

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That’s a big investment — you’re confident these levels of demand will continue?

This investment was company money and it’s based on continued faith in what we are seeing around the world. Why is demand so big? It’s because this is a true commercial product. We design it for commercial applications, and what people won’t accept, particularly here in Australia, is a service call on a product in commercial, because of the time, distance and cost involved. Speed Queen is just really, really robust. We have got laboratories that are the largest commercial washing labs in the world — our water bill is $5-to-600,000 a year. We have 120 guys, and all they do is design and test these products.

Was there a fear that if you put a commercial product into a retail setting that it would be too expensive and nobody would buy it?

I think we were surprised, to be honest. We pushed through some dramatic price increases in the United States and we thought demand would fall. To be honest, we were waiting for demand to fall. And it kept just ticking because people really see value in Speed Queen and, again, it is designed for four times the life of a consumer product.

Why does Speed Queen continue to be manufactured in the United States while other American brands move production off shore?

It is a very competitive market. There are a lot of big players any time they can save a buck they are going to do it. They have to do it because that is the nature of their world. Our world is different. In our world, price is important but it is really about value.

What is American manufacturing know for? What are its attributes?

American manufacturing is just like the Chevy Pickup: it is very much about conservative design, very over-engineered and over-built. In general, aesthetically, our products aren’t the most gorgeous girl on the floor, but they are going keep on going. It is really about understanding who your customer is.

What is the advantage of having an authorised distributor — 1300 WASHER — over establishing a subsidiary?

You have locals here that have local market knowledge and they have infrastructure. If we had to go and duplicate this around the country, it wouldn’t make sense, it would take too long, and we would never have the knowledge base, the expertise and the service network. We always say that we are only as good as our distribution network, though they have to be as good as we are. They hold us accountable and we get a chance to hold them accountable.

Have you done much research into what the Australian consumer — ‘the man on the street’ — thinks about the Speed Queen brand?

I fly all over the world and a lot of the time I end up sitting next to somebody, and they inevitably ask, ‘What do you do?’, and you tell them. And they are like ‘Oh my God, my grandmother has Speed Queen products!’

Around the world, people recognise the brand, just like they do in Australia, and because they are designed for commercial they really do just keep on working.

We know that retailers, like Harvey Norman, are excited about our brand.

It’s going to be sold Pro Forma?

Correct.

This isn’t a widespread system in the US?

No, it’s not.

Is this your first experience?

It is for me

What do you think?

I think it is pretty slick. Any time you can make it easy for the retailer you’re going to win. We hope to avoid discounting with a premium product. That’s why we feel it’s the best way to go.