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F&P Appliances scraps exclusive dealer arrangement

Fisher & Paykel Appliances has confirmed it will no longer deal with a limited number of retailers as it makes the biggest changes to its local distribution network in more than half a century.The appliance manufacturer's current distribution agreemen

Robert Smith
Tue, 30 Mar 2010

Fisher & Paykel Appliances has confirmed it will no longer deal with a limited number of retailers as it makes the biggest changes to its local distribution network in more than half a century.

The appliance manufacturer’s current distribution agreement requires it to sell products to a set number of retailers on an exclusive basis, with a reciprocal agreement for those retailers.

That agreement dates back to the 1950s but after several years of monitoring the arrangement, F&P Appliances today confirmed it has issued termination notices to existing retail partners.

The new plan – which is due to come into effect from the start of July – will see the company deal with both existing partners and new retail alliances, although the company is keeping the details of the deal close to its chest.

It did say that the plan would have an “immaterial” impact on earnings in the first year and that discussions surrounding the new distribution structure had been “positive” and were well-advanced.

Smith's City - one of the retailers that had been part of the arrangement - said in a statement that the deal had been beneficial to both parties, but a review of the trading relationship had become necessary due to the changes in retail circumstances and the fact that locally manufactured product no longer retained its economic advantage over imported product.

The retailer said it would still purchase a "substantial portion" of its whiteware from F&P Appliances, but it would now also purchase whiteware from other suppliers it already has a trading relationship with.

The new plan is designed to expand distribution of F&P Appliances products and managing director Stuart Broadhurst thanked the company’s retail partners for their loyalty and support over the years.

“We look forward to maintaining and continuing these close relationships in the years to come, as we work together collectively under the new distribution plan for the benefit of the New Zealand customer.”

The move is not the only recent change to its Australasian distribution network, with the company signing a deal earlier this month to distribute Haier products in Australia.

The new announcement comes a day after the manufacturer confirmed it no longer required a budget performance test after reducing debt levels.

Fisher & Paykel Appliance’s full year result is due in May.

Robert Smith
Tue, 30 Mar 2010
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F&P Appliances scraps exclusive dealer arrangement
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