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.

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

CarmineD wrote:

Your imagination is amazing.  When did I say that groceries gave Wal Mart an edge?   Now that you mention it, why wouldn't they?

About the only thing that I can recall is saying that Wal Mart is not a high end store.  Neither is Target or BB or CC.

Lots of changes in 2007.  K Mart may jump ahead in 2008 or 2009.  Who knows? 

mole wrote:

Hello Mole:

Here in N.LV there are the following occurrences with repairs of that particular brand:  First, with the 2 year waranty over and facing a $150 repair for a bad clutch and belt replacement, customers are trading in [not for the same brand].  Second, the customers agree to the repair, then don't claim it.  It lays in the store abandoned.  Storeowners call the customers, who say they will be in.  But never show.  In one particular store, I advised the owner, who has this problem, to post a sign clearly visible to all the customers that the store is not liable for repairs not claimed after 30 days.  I also suggested that the repair tags that are given to the customers say the same.

In the future the models with the clutches [read with the 5 year warranty] will be dyson's problems.  Both the home office and/or warranty dealers who will have to eat the cost of these repairs under warranty.  One of the reasons, among others, I did not buy a dyson until it had the 5 year warranty.

Do you think a good part of the CVS downturn is due to the bad housing market?

Carmine D.

HARDSELL wrote:

My friend:

It's not my imagination but my memory.  August 2005 on another Forum.  I was discussing the merits of BEST BUY vice Wal*Mart with a good friend Carl the Pro Prohlman.  He liked the former and I the latter for a variety of reasons. 

You chimed in and said Wal*Mart has the edge, just like you are saying now, because of groceries. 

True, Wal*Mart is the king for produce sales.  With the second far fra away.  But  as I told you then [and you forgot already] for retail store comparative sales purposes, the produce is culled out of the sales data.  Someone once told me that the largest brain is no substitute for the smallest pencil.  I agree but add if the pencil has an eraser on the end.

Carmine D.