Laundry and kitchen appliance maker Fisher and Paykel Appliances Ltd has released its lower than expected profit expectations for the 2008 financial year, and is planning on further pursuing its entry level products to adapt to changing consumer habits.
In terms of normalized net profit, Fisher and Paykel expect figures to be between $20 million and $24 million, compared with $43 million net profit for the previous period.
In terms of sales revenue Fisher and Paykel are down 13.1 per cent in New Zealand, 8.5 per cent in Australia, and 12.9 per cent and 19 per cent in the USA and Europe respectively.
The lower than expected forecast has been attributed to the loss in consumer confidence and a reduction in spending around the world.
But Fisher and Paykel has used this as motivation and is now starting to back a range of its second-tier products that are more cost effective.
The Elba brand is a range of entry level products that has been available in New Zealand and has performed exceptionally well, due to its lower price points.
Managing director and CEO John Bongard commented in a statement that “as consumers’ preference has moved from the top end of the market towards lower priced and less featured products, the Elba brand has performed well, gaining market share in New Zealand”.
Due to the rapid success of the brand in New Zealand, Fisher and Paykel is confident that a similar offering in other parts of the world will succeed, due to the current economic climate.
“This strategy will be quickly replicated opening the way for greater opportunity to the present consumer preference purchase direction,” he said.
The North American market will be the next region to launch the new range under the Elba brand, which will be exclusively distributed through Sears Outlet stores in April.
Fisher and Paykel is also planning on launching the brand in to the Australian market and is currently in negotiations.