F&P Appliances signs exclusive deal

Fisher & Paykel Appliances believes a distribution deal with retail chain Noel Leeming will reverse a drop in market share in New Zealand.

The pair have signed an exclusive deal which will see F&P appliances elbow aside brands such as Haier, Samsung and Mitsubishi in Noel Leeming's 45 stores from late April.

Only Whirlpool, the US company which has its own global alliance with F&P, will not be affected.

F&P managing director John Bongard said the manufacturer had been left "a little short" when Harvey Norman pulled out of an exclusive deal last year.

It had also been hurt by the focus of its largest retailer, Farmers, on higher margin goods such as cosmetics and jewellery after a change of ownership.

The blows suffered to distribution had pushed F&P's market share below its 55 per cent to 60 per cent target in recent months. "We're confident this will put us back there," said Bongard.

He said the deal would not impact on F&P's margins and he did not believe it would cannibalise sales from other retailers stocking the brand.

First New Zealand Capital analyst Dwane Clark said the deal was positive for F&P but was not going to outweigh the negatives it faced, such as increased competition from imports and higher raw material costs.

Noel Leeming Group chief executive Nick Lowe said the move would allow his company, which also owns the Bond & Bond chain, to stock as wide a range of brands as possible.

While the company was always "very, very concious of giving customers a good deal" it was not planning to start a price war over F&P appliances.

But he was confident the deal would still drive an increase in sales - running at about $500 million during the past 12 months - and market share.