GUD Holdings has sold its majority stake in the iconic Sunbeam brand and will exit the small appliance business, saying competing against global suppliers has become too hard for “a little Australian”.
GUD will sell its 51 per cent Sunbeam stake to its US-based joint venture partner, Sunbeam Products Inc, which trades as Jarden Consumer Solutions and owns a portfolio of appliance brands with $US2 billion a year in global sales.
JCS already owns the Sunbeam brand globally except for the Australian and New Zealand markets, which until now have been owned by GUD.
GUD managing director Jonathan Ling said tough conditions in the retail sector and competition from big global suppliers of small appliances over the last few years had prompted the decision to sell Sunbeam.
“It’s just gotten to be a very tough business that is dominated now by global players, and just being a little Australian, it’s too hard to survive,” he said.
“To survive in the appliance business you have to go international, and having to create another brand name in global markets is just too hard.”
GUD sold the other 49 per cent of Sunbeam to JCS in November 2014 under a joint venture agreement.
Sunbeam products have not been manufactured in Australia for at least 10 years and are made mostly in China.
Sunbeam products will still be available in Australia.
GUD also said it is selling its 49 per cent share of Jarden Consumer Solutions (Asia) Ltd to its joint-venture partner.
GUD expects to get about $35 million from both transactions, which are expected to completed in July 2016.
It had been intended that JCS would acquire GUD’s remaining stake in Sunbeam in 2018 but the date has been brought forward.
Mr Ling said it was better for GUD shareholders to have $35 million in the bank now rather than have Sunbeam make losses for the next couple of years.
He said GUD would use the proceeds from the sale to reduce debt and invest in the group’s other businesses, which include automotive products, cleaning products, warehouse racking, locks and pumps.
GUD suffered a 90 per cent drop in half year profit to $1.7 million, following $18.5 million in impairments related mainly to its Dexion storage and shelving business.
The Sunbeam business generated an earnings loss as currency movements forced up product costs and price increases were deferred.
Shares in GUD gained 70 cents, or 9.7 per cent, to $7.92.
SWITCHING OFF – SUNBEAM DOWN UNDER
* US brand Sunbeam arrived in Australia in 1902 as a branch of the US firm Chicago Flexible Shaft Company, which made drive shafts and sheep shears.
* In 1910, Chicago Flexible Shaft introduced its first home appliance, an electric iron.
* In 1921 the Sunbeam brand was launched.
* The company name changed to Sunbeam Corporation in 1946.
* Australia started making Sunbeam appliances in 1948.
* Sunbeam in Australia remained part of the American parent company until it became Australian-owned in 1987 when it was acquired by Reil Corp.
* GUD acquired the Sunbeam Victa business in Australia in 1996.
* Manufacture of Sunbeam products in Australia ceased in 2002.