New Sunbeam CEO Karen Hope is still settling in as the head of the Botany-based small appliance brand and the sheer magnitude of the job in front of her is only now revealing itself.
Having joined the famous Australian small brand following David Jackson’s departure in late 2013, Hope is tasked with turning around an “unacceptable profit performance”, according to Jonathan Ling, managing director of Sunbeam’s owner GUD Holdings, and to refocus product development onto innovative appliances for Australian families.
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Ling is also new to his role as GUD’s managing director, having replaced the retiring Ian Campbell late last year. He has wasted little time in focusing GUD’s gaze onto the underperforming Sunbeam, which has suffered a revenue dip of 8 per cent to $61 million and a much more significant EBIT decline of 86 per cent to $800,000.
“In my first presentation of results as managing director, I am disappointed to announce an unacceptable profit performance from GUD’s core businesses of Sunbeam and Dexion,” Ling said. (Dexion is a shelving, racking and storage system business.)
“However, I am excited about the prospect and opportunity of restoring profitability in these businesses, building on their brand strength and market positions.”
GUD and Sunbeam have previously blamed fluctuations in the exchange rate, competition from rival brands and retail trade brands and a lack of compelling products for poor sales and margin pressure. Sources inside Sunbeam speak of a silo-driven organisation where little trust exists between the three main pillars of an appliance company: sales, marketing and design.
Over the past decade, Sunbeam has lost significant appliance personalities — staff widely regarded as very talented — to its archrival Breville, including Jonathan (Jack) Lord, currently the Breville CEO and Damian Court, who is heading up Breville’s operations in the United States.
Ling has charged Hope with developing more innovating products as a priority and implementing a new program to reduce Sunbeam’s warranty costs. At the end of 2013, GUD spent $600,000 restructuring Sunbeam, which is expected to save the company $900,000 annually. Improvements in performance are expected to be evident in the 2015 financial year.
In addition to these positive changes, Sunbeam is conducting a customer and product profitability analysis in order to define a new pathway to increase earnings and evaluating new sales channels. The company has already commenced online sales of accessories.
“We have embarked upon a number of programs to improve performance in both Dexion and Sunbeam, which are being led by new CEO appointments in both businesses,” continued Ling.
“Our expectations are that profitability will improve markedly due to the actions we are currently implementing.”
Hope comes to the CEO role from the Apparel Group, where she was COO for three years, overseeing strategy, business development, supply chain logistics and private labels. Before that, Hope was the CEO of Barbecues Galore.
