Appliance giant Whirlpool has admitted UK turnover has slumped by half since the onset of the recession, but said the figure was in line with a global strategy aimed at increasing overall profitability.
Speaking at kitchen exhibition Eurocucina in Milan, vice president of products and brands, Alessandro Lombardi pledged his continued commitment to the UK but admitted the market remained "unpredictable" and that the company was targeting markets with better growth potential.
"The situation in the UK is not yet clear," Lombardi told kbbreview. "We've seen signs that fundamentals are getting slightly better but it's still too unpredictable. That's the concern we have with the UK.
"We've shrunk a lot in the UK - by half over the last three to four years. It's a concern but it was consciously done. We decided to do it to become more profitable. More than the economic crisis, I'd say the exchange rate from pounds to euros is what triggered the decision. It's the issue we're still facing in the UK when we look at this year's expectation versus last year. We expect to shrink quite a lot and will just invest in specific trade partner channels. We are targeting to shrink by about 20%."
Lombardi also revealed that the mid market squeeze has forced whirlpool to target new sectors of the market and to concentrate on the built in segment.
"The market is being squeezed for major domestic appliances," he said, "and it's a pity because that's where we're playing. We're reacting by trying to change our market position and to try to get a little bit more premium.
"We're trying to reposition the Whirlpool brand higher than in the past in the UK. It will get us into the upper end. We won't be able to compete just on price. We don't have the manufacturing footprint to compete in that segment, not with the current exchange rate. So we're trying to elevate the Whirlpool brand position overall and to try to move more into the built-in area. It's more stable and less price aggressive."
This article was reported in KBB Review
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