Godfreys, Australia’s retail experts in vacuum cleaners, missed the move by consumers from barrel vacuum cleaners to stickvacs.
And this has crushed the retailer’s profit outlook. Today the company, known for its loud television advertisements using a vacuum cleaner to suck up a bowling ball, issued a warning, saying its profit for the full year is likely to be between $4.3 million to $4.5 million compared to $6.4 million last year.
A short time ago, Godfreys shares were down more than 20% to $1.25.
“While the market for stickvacs grew by more than 60% year on year, the late arrival of our product range meant the company was not positioned to capitalise on this major trend,” says chairman Rod Walker.
Sales have been flat. The first half of 2016 hit $90.5 million compared to $90.6 million in the same six months last year. And comparable store sales for the first half were down 5.2%.
“Clearly this is a disappointing financial result which reflects execution challenges at an operational level, in particular a failure to adequately capitalise on the
significant market shift away from barrel vacuum cleaners to stickvacs,” Walker says.
The company also announced the appointment of retail executive Kathy Cocovski to replace replacing Tom Krulis as CEO. She began her career at Myer Department Stores in 1978 and has worked at Big W and Just Jeans.
“Fundamentally the Godfreys’ business is extremely robust and the board is confident that with new leadership and a refreshed approach, we can restore Godfreys’ financial performance and re-position the company for future growth,” Walker says.
Godfreys shares last traded at $1.59, down from $3.60 in March.
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