Vacuum Cleaners Discussions

Early news reports in the USA are saying the London financial markets nosed dived today in the worse downturn ever.  This comes on the heels of a 4 percent drop in the Dow Jones Industrials last week alone.  Since today is a Federal Holiday in the US in observance of Dr. Martin Luther King the financial markets are closed.  Not sure what impact the London market fall will have on the US markets--have to wait to see.

What and how long will it take jaydee to realize that he needs to enter the low to middle price range vacuum market to stay competitive in the USA in the big box stores' venue?

Any news yet on the 2007 dyson sales? 

Carmine D.

Please indulge me with the post script to this thread.  It now appears that the Fed Chief Ben Bernanke not only flinched and panicked with the January 22 interest rate cut but he was "bluffed" too.

By Friday, January 25, the consensus among all the people in the know was that the international financial markets' drop on Monday January 21, a national Holiday in the US to commemorate Martin Luther King Jr, had nothing to do with the US markets' fall the week earlier.  Notta.

The drops were a result of a low level rogue trader in a French bank who cost the company over $ 7 Billion in losses.  How?  By taking unauthorized positions and making fraudalent trades.  All of which should have been caught by internal control procedures which the 31 year old bank employee circumvented.  The estimated losses may reach over $70 Billion after the company unwinds the trades, which it was doing on Monday unbeknownst to the US Central Bank and the Fed Chairman.  And in all likelihood these trades caused the volatility and declines that rattled European markets on Monday, January 21 and the US market decline on Tuesday morning before the Fed cut the rate by 3/4 point.  The largest single rate cut in over 20 years!

Now, Benboy Bernanke has a perception and credibility problem. 

When Benboy called an emergency teleconference meeting of the Open Market Committee on Monday evening to twist the arms of the Fed Bank Chiefs to drop the rates, ALL but one agreed.  Who was the lone dissenter?  The Fed Bank Chief in St. Louis, Missouri.  The only one to vote "no" on the interest rate cut and say that the Fed should wait until January 30 [during its regular scheduled meeting].  Alas in our democratic scheme of things, majority rules even when the majority is wrong.  The Fed acted Tuesday morning and the rest is history.

If I were Benboy's boss, and I am not fortunate for him, he would have his resignation signed, sealed and delivered to me on my desk this Monday morning.  Two days before the regular meeting of the Fed Open Market Committee.  And Ben's successor would be................you got it.  The man from the St. Louis Fed Bank who bucked the trend. 

Carmine D.

Most economists predict rough economic times ahead.  That could last well into 2009 and beyond.

Drawing parallels in today's economy with that of the Carter years [mid to late 70's] and the Bush 1 years [early 90's].  BUT, most economists say the signs now are much much worse than in these two previous times.  Why?  Unusually high oil and food prices.  And a much worse housing market.  With rising unemployment.  And lower corporate earnings reports.  Plus one of the largest declines in consumer spending.  All bode doom and gloom in the days ahead.  BTW, how many vacuum pros made it to Las Vegas this year for the VDTA?  I recall the brohaha last year when HOOVER wasn't represented.  What happened this year?

How will these rough times ahead affect vacuum sales?  Well, we already know from the NPD that new vacuum sales were off 3 percent in 2007.  After an extended period of increasing annual vacuum sales due in large part to dyson sales.  Most economists say that the first clear cut sign of the bad economic times was the extremely poor consumer spending numbers for the 2007 Holiday season and in January 2008.  The worse in 20 years by some accounts.

So.... I suspect the beginning of the vacuum sales fall off started in late 2007 and will probably get worse as the months ahead unfold.  Who will be hit the hardest?  No question, the big box retailers who enjoyed a bullish market in vacuum sales from 2002-2007 in large part due to dyson sales.  With a fall off starting in mid to late 2007 causing the entrenchment by most big box retailers in their vacuum inventories now.  How?  Lowering prices, offering giftcards in concert with discounts, and culling brands and models with clearance prices.  The latter usually from the ranks of the hard to move sellers [read high end prices]. 

Surely any vacuum insiders here who are privileged to vacuum sales information which contradict mine will correct me if I'm wrong.  Pity the thought that I spread negativity and lies.  

ALL COMMENTS WELCOME EVEN COMPANY PROPAGANDA [READ SALES PUFFING AND ROSY SCENARIOS FROM PRIVATELY HELD COMPANIES NOT SUBJECT TO THIRD PARTY AUDIT SCRUTINY AND REVIEW].

Carmine D.

CarmineD wrote:
I think that those who buy expensive items (vacuums or otherwise) will continue this trend although they may wait for better financial forecasts.   I do not see them running to WM or other stores to buy the low end. 

JMHO...I think the coming years will be good for a company who can come up with a QUALITY vacuum that is healthy, compact and has a good powerhead for $500 or at least, under $600.00 MAX, that is NOT MADE IN CHINA. So it should be good for Eureka/Electrolux. While not a great machine (hard to work on and those hose & wand contact problems). It's priced well and gets a good review from CR (which seems to be the only criteria for many people). If I were the Germans I would take the hit for a few years in exchange for market share. SEBO should offer the K3 in that price range and try to make it up by splitting some of the difference with the dealer in profit margin and raise the back end prices like bags and filters. Also offer less warranty like a 2/5 year or 3 year. It's very hard to get the Germans to think like Americans when it comes to marketing (this is both good and bad and sometimes frustrating) I'm assuming sales are good in Europe so things won't change unless they lose too much market share in the US...then creative thinkers might be listened to.

Lucky1 wrote:

The economic malaise is global.  Europe and Japan are not exempt in part because their markets and economies are tied to oil and food prices which are at record highs worldwide.  The economies faring better are India and China. 

Carmine D.

HARDSELL wrote:

My good friend and fellow:

In a sluggish economy [read recession], the more upscale the retailer, the more they're struggling.  Why?

Department store operator Macy's needed a one time tax benefit to rescue the 4th quarter results it released this week.  Target [cheap-chic] did better with an 8 percent drop in quarterly earnings that was still a little higher than analysts expected.

And your favorite Wal*Mart with its strong emphasis on low prices reported a solid fourth quarter.  It's stock price has fared better than all other retailers this past year: Up 8.1 percent at $51.40.  Including BEST BUY which is down 11.7 percent at $46.50.

Another: Nordstrom said profits fell 8.6.  I can go on.  But I think [hope] you get my point.  In short, the retailers' results in 2007 and so far this year are the worse in 40 years.

I'll overlook how absurd your first statement is with regard to the US housing market for 2007 and [according to the gurus] for well into 2009, 2010, and some say even 2011.

Ben Bernanke told Congress he will cut interest rates further.  Why?  Stimulate the sluggish economy.  I expect with absolute certainty that the Bush Administration will push through another financial stimulus package next year in time for the election.  Not because financial forecasts are better but because they are much worse.  Problem:  Ben is fighting a war on two fronts:  Recession at the front door, and inflation at the back.  Consumers are squeezed in the middle.  Higher consumer prices [food and oil are the worse], lower wages [down almost 2 percent in 2007], decreasing asset values [read home values and savings] and increasing unemployment with lower company earnings. 

When exactly do you predict better financial forecasts? 

Carmine D.

CarmineD wrote:

As usual, in your haste to show your superior knowledge you failed miserably in your rebuttal to my comments. 

Not once did I mention struggling retailers.  I only said that most consumers who are  accustomed to upscale purchases will not rush out buy inexpensive goods.   Do you predict a recession to be eternal?  I do not think so, therefore many will wait out the storm.  Unfortunate as it is for some now is a great time to buy a home.

Hello Good Friend:

Who sells expensive items [like high end vacuums]?  Answer:  Upscale retailers not Wal*Mart.

Now may be a good time to buy a home if you qualify [read credit worthy, currently employed and have been for awhile with certainty for future too, and willing to put 10, 20 percent down].  BUT... tomorrow, or next week, or next month, or next year may even be a much better time.  With steadily declining housing prices, the inventory of unsold new houses at all time highs, and many high end home builders reporting declining profits, losses and even bankruptcies, why buy now?  Wait to see what tomorrow brings.  BTW, how are new vehicle sales [one of your favorite industries to reference]?

You ask me how long will the recession last?  I asked you first.  It was the question about when consumers can expect better financial forecasts.  I answered the question for you too.  2009, 2010, 2011 even longer.  Why?  The answer is really unknown and uncertain.  In large part because Ben Bernanke is fighting stagflation.  Two very different economic problems.  To the extent he and the Fed tackle the current recession on the front door [by cutting interest rates] they fuel inflationary pressures.  To the extent they tackle inflation by raising rates/reducing the new money supply in circulation, they fuel the recession. 

This is the same economic condition that Jimmy Carter experienced in his one term presidency under the tutetage of Paul Volcker as the Fed Chairman.  Ronald Reagan easily won 44 states and 500 electoral votes in 1980. 

Most are predicting that today's conditions are much worse.  Why?  Housing market much worse.  Oil prices while high then and a source of the inflation are at all time record highs now. 

The point you should get from all this is that new vacuum sales especially your favorite brand [dyson] at upscale retailers retrenched in the last quarter of 2007.  They are continuing to languish and will decline much further in the months [and even years] ahead.   Retailers have shelves and warehouses full of unsold expensive items [like vacuums] in inventory.  Not exactly the best time to buy more to sell to budget conscious credit pinched US consumers.

Carmine D.

HARDSELL wrote:

Hello Dear Friend:

From what I read in the retail industry, NOT ONLY has Wal*Mart knocked out BEST BUY with the sale of electronics and related items in 2007 and still, but also cheap-chic Target on housewares and apparel.  I see the latest Target TV ads conspicuously excludes the usual dyson.  And Wal*Mart is running the DC18 for $498 with a few extra tools and a $100 Wal*Mart Giftcard with the DC18 purchase.   While supplies last.

Apparently, it's not the groceries that give Wal*Mart it's edge [as you biasely like to report].

It seems Wal*Mart is the US retailers' standard to follow in the current economy.  And confused Target execs are scratching their heads wondering what the heck happened.  Why?

In 2005 and 2006, Target same store sales grew at twice the rate of Wal*Mart's.  In 2007, Target same store sales nudged up a disappointing 0.2 percent compared to gains of 1.7% at Wal*Mart.  "Expect More" should be the Wal*Mart message rather than Target's.

Carmine D.

Hi Carmine, You know what this economy is really making the rebuilt vacuum market take hold,as you say what goes around comes around,we are swamped with high end trade ins,you more than likely know the brands,the sales puffing,and hype is starting to really bite these guy's in the A$$, I would be very surpised if some of them are still in the floorcare business with in the year.Only the strong and talented will survive this storm ............B.T.W. the cvs industry is really taking a beating,more like 40 to 50% off of last year...........Of course you saw this coming for over 2 years now.

Take Care

MOLE