F&P gives up exclusive dealers

Fisher & Paykel has used an exclusive retail arrangement for 50 years. Photo / Richard Robinson

Fisher & Paykel Appliances has announced it will give up its exclusive dealer arrangements with New Zealand retailers after more than 50 years.

Under the listed whiteware maker's existing distribution agreement, its appliances are sold to a limited number of retailers including Farmers, Smiths City and Noel Leeming.

Those retailers, under the current distribution terms, are allowed to stock only Fisher & Paykel whiteware products.

The exclusive dealer arrangement would be terminated on July 1 this year, and would allow Fisher & Paykel Appliances to supply a wider range of New Zealand retailers.

Fisher & Paykel Appliances' retailers, in turn, would be able to stock products made by other whiteware manufacturers.

The new arrangement was expected to have a minimal impact on the company's earnings over the first year.

News of the distribution arrangement being terminated had little effect on the company's share price yesterday, closing up 1c at 62c.

Fisher & Paykel Appliances chief executive Stuart Broadhurst said the existing arrangement with retailers was "past its use-by date".

The decision to change had been made after monitoring the company's distribution structure for a number of years.

"We see this [change] as a win-win. It's going to be better for Fisher & Paykel, better for the end consumer, and better for our retail partners."

He said ending the arrangement would strengthen the company's potential market base through increased distribution of its products.

Craigs Investment Partners research analyst Dennis Lee said Fisher & Paykel Appliances' change of tactics could have something to do with core retailers, such as Hill and Stewart, closing down in recent months.

"The market has changed," he said. "Markets are competitive and new brands and stores coming in means outlets [supplied by Fisher & Paykel Appliances] need to be increased."

Broadhurst said Hill and Stewart's closure was only "one small part"of the new arrangement.

"At consideration it's not just any one thing."

Smiths City Group said in a statement that it would begin stocking whiteware from suppliers other than Fisher & Paykel Appliances after the current distribution arrangement ended in July.