Jacuzzi
Announces Preliminary Quarterly Results
Jacuzzi
Brands, Inc. has reaffirmed its 2007 guidance and announced selected preliminary
financial results for the fiscal 2007 first quarter ended December 30,
2006. Net sales for the first quarter of fiscal 2007 are estimated to
be approximately $272m compared to $267.1m in the first quarter of fiscal
2006. Operating income is estimated to be $18 million compared to $21.1m
for the same period one year ago.
Net income from continuing operations for the first quarter of fiscal
2007 is estimated to be $0.06 per diluted share which included $0.02 per
share of net charges for merger and other costs described below. This
compares to net income from continuing operations of $0.16 per diluted
share in the first quarter of fiscal 2006 which included $0.08 per share
of net gains for items described below.
The increase in estimated sales was the result of increased sales at the
Plumbing Products segment (Zurn) of approximately 12% partially offset
by a 4% decrease sales in Bath Products. Zurn's sales growth was driven
by improved sales of existing products, including PEX products, specification
drains, commercial brass, and Wilkins(TM) brand products, as well as higher
sales of new products. Increased sales at Zurn also reflected price increases
that partially offset higher raw materials costs. Bath Products sales
declined due to weak demand for U.S. whirlpool baths and spas in a challenging
domestic operating environment characterized by ongoing sluggishness in
both new residential housing sales and the remodeling market. U.S. whirlpool
bath sales were also adversely affected by destocking programs implemented
by several major customers in response to current market conditions.
The decline in estimated operating income was primarily due to an approximately
40% drop in income in the Bath segment due to operating losses at the
U.S. whirlpool bath operations. The operating losses at the U.S. whirlpool
bath operations resulted from the decline in sales noted above and unfavorable
manufacturing absorption variances generated from the resulting decline
in production. Zurn's operating income increased 3% over the prior period.
While operating income at Zurn increased in dollars, operating margin
for the first quarter of fiscal 2007 declined from the same period last
year due primarily to the inability to recover higher copper prices. Corporate
expenses in the first quarter of fiscal 2007 included $1.2 million of
additional pension income versus the prior year period.
Estimated net earnings from continuing operations in first quarter of
fiscal 2007 included restructuring charges of $0.7 million, a $0.6 million
gain from the sale of real estate, and merger-related expenses of $2.3
million which reduced net earnings per share by a total of approximately
$0.02 per share. Net earnings from continuing operations in first quarter
of fiscal 2006 included restructuring charges of $1.6 million, a $1.7
million gain from the settlement of a property tax liability, and a $9.3
million gain from the recognition of deferred profit on the sale of real
estate which increased earnings per share by a total of $0.08 per share.
The Company is reaffirming its December forecast of fiscal 2007 earnings
of $0.75 per share from continuing operations. This forecast includes
$0.04 per share of income from the sale of surplus properties. The Company
noted that its first fiscal quarter has historically reflected its seasonal
low point in sales. The Company forecasts that the recent weakness in
the US whirlpool bath operations will be offset by increased sales in
its primary selling season as a result of new product introductions and
improving market conditions, including a pick-up in the renovation markets.
ISS
Recommends 'FOR' Vote Proposed Merger with Apollo Management
Jacuzzi
Brands, Inc. has announced that Institutional Shareholder Services (ISS)
recommends that Jacuzzi Brands' stockholders vote ‘FOR’ the
proposed merger with affiliates of Apollo Management L.P. at the Company's
January 25th, 2007 Annual Meeting of Stockholders. Stockholders of record
as of the close of business on December 11th, 2006 will be entitled to
vote at the meeting.
ISS is a leading independent U.S. proxy advisory firm and its voting analyses
and recommendations are relied upon by hundreds of major institutional
investment funds, mutual funds and fiduciaries throughout the country.
‘We are pleased that ISS recommends that Jacuzzi Brands' stockholders
vote FOR our proposed merger with Apollo,’ said Thomas B. Waldin,
Chairman of the Board of Jacuzzi Brands. ‘Our Board of Directors,
with the assistance of our financial and legal advisors, conducted an
extensive and thorough review of the Company's business and operations,
and concluded that the proposed merger with Apollo is the best alternative
for Jacuzzi Brands and its stockholders. We look forward to closing the
transaction and urge all Jacuzzi Brands stockholders to vote FOR the proposed
merger with Apollo today.’
In recommending that Jacuzzi Brands' stockholders vote ‘FOR’
the proposed merger with Apollo, ISS stated:
‘Based on our review of the terms of the transaction and the factors
described above, specifically the market premium, the lack of a higher
bid despite the low termination fee, and the relatively subdued outlook
for the Bath segment, we believe that the merger agreement warrants shareholder
support.’ (Permission to use quotations from the ISS report was neither
sought nor obtained).
On October 11th, 2006, Jacuzzi Brands, Inc. and affiliates of Apollo Management
L.P. entered into a definitive merger agreement, pursuant to which Apollo
would acquire all of the outstanding common stock of Jacuzzi Brands for
$12.50 per share in cash and assume all outstanding debt, valuing the
total transaction at approximately $1.25 billion. The transaction is subject
to Jacuzzi Brands' stockholder approval and other customary conditions
and is expected to close in early to mid-February 2007.
Stockholders are encouraged to read Jacuzzi Brands' definitive proxy materials
in their entirety as they provide, among other things, a detailed discussion
of the process that led to the proposed merger and the reasons behind
the Jacuzzi Brands' Board of Directors' recommendation that stockholders
vote ‘FOR’ the approval and adoption of the merger agreement
and the merger.
The vote of Jacuzzi Brands' stockholders is very important regardless
of the number of shares of common stock they own. Whether or not stockholders
are able to attend the Annual Meeting in person, they should complete,
sign and date the proxy card and return it in the prepaid and addressed
envelope as soon as possible. If stockholders fail to return their proxy
cards, fail to attend the Annual Meeting and vote in person, or fail to
register their vote by telephone, the effect will be that their shares
will not be counted for purposes of determining whether a quorum is present
at the Annual Meeting and, if a quorum is present, the failure to vote
will have the same legal effect as a vote against approval of the merger
agreement and the merger.
Stockholders who have questions about the merger, need assistance in submitting
their proxy or voting their shares should contact the Company's proxy
solicitor, Georgeson Inc., 17 State Street, New York, New York 10004,
Telephone: (212) 440-9800 or toll-free at (866) 238-7667.
About Jacuzzi Brands
Jacuzzi Brands, Inc., through its subsidiaries, is a global manufacturer
and distributor of branded bath and plumbing products for the residential,
commercial and institutional markets. These include whirlpool baths, spas,
showers, sanitary ware and bathtubs, as well as professional grade drainage,
water control, commercial faucets and other plumbing products. Our products
are marketed under our portfolio of brand names, including JACUZZI®,
SUNDANCE®, ZURN®, and ASTRACAST®. Learn more at http://www.jacuzzibrands.com.
Premium
Appliance Brands Buys Catalyst Home Products
Warrington-based
white goods firm, Premium Appliance Brands (PAB), yesterday (18th January)
announced its acquisition of appliance firm Catalyst Home Products Ltd,
as part of its 2007 expansion plans.
The
news comes only weeks after Premium Appliance Brands was named as one
of the 100 fastest growing private companies in the UK, with this looking
set to raise the company's standing even further.
Catalyst Home Products Ltd, which was established in 2003, owns the rights
to a number of celebrity endorsed brands including the Oz Clarke portfolio
of wine products, the Cosmopolitan branded range of small appliances and
the Rosemary Conley range of grills, steamers and juicers. The company
enjoys distribution with a number of major retailers in the UK, including
Argos, Comet, Currys, Tesco, Sainsbury, Morrisons and the Co-op. This
strategic move to merge the two companies will see the Catalyst name and
brands continue, headed up by founder Paul Sykes.
In its three operational years, Catalyst Home Products has been extremely
successful and grown significantly, but has realised that it cannot continue
this growth without major investment. Joining forces with PAB will facilitate
a step-change in the business, offering increased scale via an established
UK infrastructure, and providing access to new product sources. It will
also assist PAB's move into the branded sector, which began with the successful
launch of its White-Westinghouse portfolio in June 2006.
Guy Weaver, Managing Director of Premium Appliance Brands, comments, ‘This
is our second acquisition, following our purchase of the appliance division
of Bernstein Group Holdings in 2004. Catalyst Home Products is an extremely
successful business and we are delighted to be bringing it on board and
working with its Managing Director, Paul Sykes. This acquisition is going
to help PAB move further into the branded and small appliances sectors
of the market and will help fuel our growth in the coming year.’
Web: http://www.pabl.co.uk
Whirlpool
Corporation Sells Former Maytag Properties
Whirlpool
Corporation has sold a number of former Maytag Corporation facilities
in Newton, Iowa; Florence, S.C.; Galesburg and Herrin, Ill.; Searcy, Ark.;
and Ranson, W.Va. Whirlpool acquired Maytag in April 2006.
‘We are pleased see the transition plans for each of the former Maytag
properties. We have been working in cooperation with business and community
leaders in each of these locations to develop appropriate plans for the
former Maytag properties,’ said David L. Swift, president, Whirlpool
North America. ‘We believe that the sale of these properties and
the resulting future reuse and redevelopment is another important step
forward in the ongoing transition of each of the communities.’
Administrative Space in Newton, Iowa
Whirlpool has sold the majority of the Maytag headquarters building complex
to Iowa Telecom. Following the sale, some of the property will be transferred
from Maytag to the Des Moines Area Community College (DMACC) to be converted
and used as a regional vocational training center. In the near future
Whirlpool has the option to sell to the Jasper Community Foundation the
vacant Maytag manufacturing facility in downtown. Plans call for the elimination
of the old buildings to improve the area with a planned green space.
Whirlpool also will lease back some of the headquarters facility through
2007 to support certain integration-related work that will continue into
the second half of 2007.
In addition to the activities outlined above, Whirlpool will transfer
the former Product Development building in downtown Newton and the Maytag
Guest House to the Jasper Community Foundation to support long-term economic
development strategies in the community.
Manufacturing sites in Galesburg and Herrin, Ill.; Searcy, Ark.; Ranson,
W.Va. and Newton, Iowa
Whirlpool has sold the former Maytag manufacturing facilities located
in Galesburg and Herrin, Ill.; Searcy, Ark.; Ranson, W.Va.; and Newton,
Iowa, together as a package to Industrial Realty Group (IRG) of Los Angeles.
IRG specialises in the redevelopment and adaptive reuse of excess corporate
real estate and manufacturing facilities, closed military and government
facilities, underutilized corporate campuses, industrial parks, and large
vacant buildings. IRG is among the largest private owners of commercial
and industrial properties in the United States and is widely recognised
as one of the leaders in repositioning assets through adaptive reuse.
Whirlpool will lease back the plants in Herrin and Searcy through April
2007 to ensure proper cleaning and shutdown operations occur as planned.
Whirlpool previously announced the closure of both plants.
Whirlpool also will lease back the Newton plant, as well as the adjacent
manufacturing support facilities, through February 2008 to ensure proper
cleaning and shutdown operations occur as planned. Whirlpool will continue
to operate one of the adjacent manufacturing support facilities for up
to five years to support the production of spare parts. Whirlpool previously
announced that the Newton plant would close in the second half of 2007.
In Galesburg and Ranson, IRG will begin discussions with community officials
and business leaders to determine possible redevelopment plans.
Florence, South Carolina
The former Maytag manufacturing facility in Florence, S.C., has been sold
to Hackman Capital Partners, LLC of Los Angeles, a private asset-based
investment firm that specialises in the acquisition of real estate and
capital assets. The company focuses on value-added real estate investments
that involve either leased or vacant industrial properties, capital assets,
financial restructurings or other unique real estate opportunities where
complex processes must be navigated to successfully restructure or reposition
the investment.
Franke
Appliances Rated A for Performance
All
appliances from Franke, the manufacturer of kitchen solutions, are A-rated,
helping consumers to save energy, money and the environment.
A-rated
appliances are the most energy efficient, resulting in lower fuel bills.
They also help to protect the environment as they do not contain harmful
CFCs or HFCs and help to reduce carbon dioxide emissions by using less
energy.
The energy efficient appliances from Franke do not however, compromise
on performance.
John Swain, product manager, said: ‘Franke is committed to protecting
the environment and has ensured that all appliances are A-rated.
‘This includes the new range of Franke waste disposal units which
are not only energy efficient but also help the environment by reducing
the amount of waste going to landfill.’
Franke appliances are grouped together into eight different Systems, each
consisting of one hob, hood and oven.
The Systems have been selected on aesthetics, containing those appliances
which complement each other and offering complete coordination in the
kitchen, particularly if teamed with a Franke sink and tap.
In addition to the eight Systems of appliances offered by Franke, there
are a further eight Designer hoods, reflecting the fact that the cooker
hood is often a key design statement in the kitchen.
The manufacturer has also recently introduced a new range of waste disposal
units, which complete the current appliances offer from Franke.
For further information about Franke appliances, visit http://www.franke.co.uk
or call 0161 436 6280.
Built
in cooking appliance brand leader Neff has launched 'The Recipe Collection',
a new bespoke cook book created to give consumers a helping hand with
their Neff built in oven.
The
stylish 100 page full colour cook book has been developed in conjunction
with Seven Publishing who produce a number of leading national consumer
food titles, including 'Sainsbury's Magazine' and 'Delicious'.
Specifically designed to focus on Neff's individual culinary strengths,
the cook book offers a tantalising selection of starters, main courses
and desserts. There are separate sections for each Neff oven function,
such as CircoTherm, CircoRoasting and Bread Baking, to help consumers
make the most of the many and varied cooking options available when choosing
a Neff oven.
lllustrated with eye-catching photography, all 68 original recipes in
the book incorporate easy step-by-step instructions and have been double
tested by Seven Publishing and by Neff's in-house experts to guarantee
accuracy. The recipes themselves are an enticing combination of traditional
and contemporary styles to reflect current food and cooking trends, as
well as the nation's emphasis on healthy eating.
For just £7-99 per copy, consumers can order Neff's new cook book
now via the Neff website at www.neff.co.uk
or by ringing the special dedicated cook book phone line on 0870 727 6926.
Comments Neff Brand Manager, Hannah Watson: 'At Neff, we are passionate
about cooking so we see this new cook book as a key element in our marketing
strategy. It's intended not only to improve our customers' cooking experience,
but also to increase understanding of the potential possibilities that
can be achieved using a Neff oven for everyday cooking.'.
GDHA
Goes the Distance Over Christmas
Service
engineers for Glen Dimplex Home Appliances literally went that extra mile
this Christmas, travelling a total of over 2000 miles on Christmas Eve
period to ensure that the festive season went smoothly for all its customers.
The 52 service engineers on call over the Christmas period for Stoves,
Belling and New World travelled the country answering distress calls from
desperate customers suffering from all manner of emergency mishaps with
Christmas dinner imminent.
When one Stoves customer found that her Stoves 600GR Rotostar oven would
not light properly at the last minute, service engineers, Tony Phillips
and Darrell Atherton, and Chris Sullivan from GDHA's Central Parts Centre,
certainly went the distance to make sure they got it working in time to
cook for her guests.
Service engineer Tony quickly realised that the cooker required a solenoid
valve, which he didn't carry in his van, and immediately contacted the
service centre to see what could be done. To make sure that the vital
part arrived in time, Chris made the two and half hour journey to our
customer in Loughborough and Darrell, the second service engineer then
returned to the customer's house to fix her cooker late on Christmas Eve.
The happy customer's oven was up and running in time to prepare a full
Christmas dinner for fifteen family members, all of whom were making a
long distance journey for the holiday.
The grateful customer said:
‘When I realised there was a problem with my oven on Christmas Eve,
I panicked. I decided to give Stoves a call - just in case - and was amazed
when the phone was answered. Within half an hour, Stoves called back to
say they had managed to locate an engineer who would be with me by 11am.
‘I was amazed when the engineer told me that although he didn't hold
the part in his van, he had managed to locate one and it was currently
on its way to me from the factory in Liverpool and so that when the second
engineer returned later he could fix my oven. The part arrived as promised
and my oven was repaired in no time. I can't thank Stoves enough. The
customer care team and the engineers went to great lengths to make sure
we had a super Christmas. I just didn't expect to receive such a high
level of service on Christmas Eve and would recommend the company to anyone.’
Customer
Care Director for GDHA, Paula Hodkinson (pictured), commented:
‘It's fantastic to receive such great responses from customers. The
customer care team was really geared up for Christmas to ensure as many
emergency repairs as possible could be carried out in time for Christmas
Day. We kept the call centre open until 1pm on Christmas Eve and over
50 of our 139 engineers volunteered to work.
' All faults reported on the 24th December were resolved by close of business,
ensuring no customers were left without cooking facilities for the festive
period.
‘To get such positive feedback makes it really worthwhile, so a very
big thank you to the customer care team and all the engineers who clocked
up the miles to help get turkeys on the table’.
GDHA recently won the Domestic and General Award for Total Excellence
& Quality in Customer Care for the second year running when the organisation
beat its own record from last year to achieve the highest ever score for
customer satisfaction.
Web: http://www.gdha.com
£50
Device Would Have Stopped Tot Scalding
A
£50 anti-scald device incorporated into the bathroom plumbing could
have prevented the horrific injuries sustained by Jordan’s four year
old son Harvey. He managed to douse himself with scalding bath water in
an accident on New Years Eve.
Cynthia Fisher of Intatec, the Staffordshire company who manufactures
anti-scald valves said 'Injuries like this are preventable. Anti-scald
valves mix hot and cold water together, making sure that water coming
out of the tap is at a safe temperature. For parents concerned about the
welfare of their children, it’s one less thing to worry about. We
wish little Harvey all the best for a speedy recovery from what sound
like very nasty injuries, and hope that this upsetting incident will serve
to highlight the dangers to other parents, and prompt them to fit an anti-scald
device.'
There are an astonishing 20 deaths and 570 serious injuries every year
in Britain caused by bath time scalding, most of the victims are under
5 or over 65.
Anti-scald valves are compulsory under new regulations for all new bathrooms
in Scotland, as well as in healthcare premises right across the UK. The
Government shelved plans to make anti-scald valves compulsory in England
and Wales late last year. For plumbers and installers Intatec publishes
a free booklet ‘Everything you need to know about anti-scald’
which is available from plumbers merchants.
Web: http://www.intatec.co.uk
Nicholas
Anthony Predicts the Trends for 2007
Tony
Nicholas, Managing Director of Nicholas Anthony predicts kitchen trends
for 2007
Colour
Homeowners are becoming more inclined to experiment with colour. As a
result, we will see colour becoming more prominent in the kitchen - not
the subtle hues we've been used to but strong, dynamic colours like purple
and burgundy which make a bold design statement. For those who still remain
hesitant about this development, a compromise can be reached: around one
third of the kitchen can take a vibrant colour without it becoming too
overpowering. This works well particularly in the larger kitchen but even
a smaller space can carry off the use of vibrant colours if it is carefully
designed, incorporating colour into splashbacks or shelving for instance.
Dark
wood
The trend for practical modern kitchens will continue but the stark minimalist
style will be replaced by a greater degree of warmth, which will lead
to an increase in dark, sumptuous wood such as rich walnut. Also becoming
popular is emphasising the beauty of the grain to create a central focus
to a contemporary or traditional kitchen. We‚ll also see an increased
interest in veneers which can be cut at different angles to create unusual
grain structures or patterns, or to emphasise or eliminate specific features
of natural solid wood such as rings or knots.
Materials and textures
Overall, the trend in kitchen design is all about mixing materials and
textures. In the purple Classic Line kitchen, the luxuriant combination
of rich purple cupboard doors look stunning when combined with a jet black
composite stone worksurface and aluminium handles. In the Nut Tobacco
kitchen, the rich contemporary walnut finish is complimented with a stunning
blend of Polar White glass, stainless steel and white Cesarstone.
Tony Nicholas, MD, commented: 'Be brave and bold when it comes to colour
- don‚t be daunted. Steer away from the impersonal minimalist look,
and opt for warm, cosy kitchens where you can feel at home. With many
styles on offer, choosing a new kitchen can be overwhelming but a good
designer will steer you through the many decisions to be made, providing
you with a kitchen that you‚ll love for many years to come.'
Nicholas Anthony is a kitchen and bathroom specialist with showrooms in
Ascot, Colchester, Knightsbridge and London W1. The company's expert service
includes complete design and installation of your kitchen and bathroom
with advice on the best solution for your home and lifestyle. Nicholas
Anthony kitchens retail from £15,000.
For more details on Nicholas Anthony, telephone 0800 0683 603 or visit
http://www.nicholas-anthony.co.uk.
Adam
the Robot Scientist Wins Intelligence Awards
The
Electrolux Sponsored Artificial Intelligence Awards are held annually
at Cambridge University by the British Computer Society. The finalists
in this year’s competition had been asked to produce real working
intelligent machines and present them to the Society at the finals on
12th December 2006 at Peterhouse College.
The members then cast their votes and the winner received a plaque from
the Society and a cash prize from Electrolux.
The winner was 'Adam', The Robot Scientist, developed by Emma Byrne and
the team at the University of Wales, Aberystwyth. Adam can reason about
experiments and experimental results on the function of genes in yeast.
Adam’s machine intelligence allows Adam to carefully choose useful
experiments to determine these functions.
There are potentially 10 to the power of 13 experiments for each of the
6000 or so genes in yeast, but careful selection of the most useful experiments
can reduce this number to a mere handful. Without Adam, it would take
longer than the existence of the universe to carry out all of these experiments.
Emma hopes that future developments in the automation of scientific experimentation can assist in the discovery of useful new human medicines. This groundbreaking work is not yet carried out anywhere else in the world.
Head
of Sustainability at Blanco takes Delivery of Bio Power Car
Personal
commitment comes with the job for Blanco's Sustainability guru Dr Chris
Moon, and last month saw him take delivery of a new car from Swedish manufacturer
SAAB, which runs on 'bio power', in this case bioethanol.
The car company claims that the new SAAB 9-5 produces 70% less CO2 than
a standard model.
Blanco UK appointed Dr Moon last year to overhaul the company's internal
processes with a view to working towards more sustainable office practices.
A number of new procedures at the company's North London HQ are now in
place. BLANCO already offers a number of 'greener' options in its product
range, including water saving taps, waste sorting systems and a wide range
of recyclable stainless steel sinks, which themselves incorporate a high
percentage of recycled material.
Tel: 020 8450 9100
Email: salesdesk@blanco.co.uk
Web: http://www.blanco.co.uk
Launch
of the Furniture Ombudsman
From
1st January 2007 Qualitas has changed its name to The Furniture Ombudsman.
This new name will better illustrate the role and benefits of the service
and will act as a clear signpost for good business practice. Whilst Qualitas
members realise the many services offered, often consumers are unaware
of the benefits and peace of mind that come with buying from a Qualitas
member until it’s too late.
At the same time, the dispute resolution service is undergoing a major
overhaul aimed at making the decision process faster and less cumbersome.
Consumer groups have warmly welcomed the change to the existing 2 tier
approach - involving conciliation and, in a small number of cases, adjudication
– which will be phased out during early 2007 and will be replaced
by a single process.
Parties in dispute will be given much greater guidance as to what needs
to be submitted and in what form, so that paperwork is reduced and resolutions
reached more quickly. A formal appeal process, overseen by an independent
panel, will further strengthen the system.
The new identity and approach will help reassure customers and build confidence
in the furniture retailing industry.
http://www.qualitas.uk.com/
Dyson
Complaint Against Miele Company Ltd Upheld
A
complaint from Dyson objecting to a magazine ad for Miele vacuum cleaners
was upheld on all of the six objections according to information published
by the Advertising Standards Authority (ASA).
Complaint
A magazine ad, for Miele vacuum cleaners, was headlined ‘BAGS BETTER’
Miele Vacuums - Setting the record straight’. A graph under the headline
showed the cleaning performance of a Miele vacuum cleaner against the
‘leading bagless brand’.
Dyson, who believed the ‘leading bagless brand’ was the Dyson
DC11, objected that:
1. the graph was misleading, because they believed Miele had not used
the most comparable Dyson cleaner, which they said was the DC08 model;
2. the graph was misleading, because it showed the results of a dust pick-up
test, not a fibre pick-up test, which Dyson believed their cleaner would
perform more favourably in;
3. the graph was misleading, because they believed it erroneously implied
Miele's cleaner provided constant performance;
4. the graph and the image of a pile of dust were misleading, because
they believed Miele's cleaner would leave behind more dust over 12 years
than their DC08 cleaner;
5. the claim ‘first class cleaning performance’ was misleading,
because they believed their DC08 cleaner out-performed the advertised
Miele cleaner and
6. the ad was misleading, because they believed there was no internationally
recognised IEC standard test for measuring lifetime pick-up performance
and they believed Miele's test methods were unreliable and incorrectly
assumed the Dyson post-motor filter became clogged over time.
Codes section: 3.1, 7.1, 18.1, 18.2, 18.3
Adjudication
Miele Company Ltd (Miele) believed the ad was objective, relevant and
verifiable and did not mislead. They sent a range of consumer reports
and independent tests as evidence for the claims. The ASA sent Miele's
evidence to an independent expert for evaluation.
1. & 2. Complaint upheld
Miele said their cylinder vacuum cleaners were directly comparable to
Dyson's entire range of cylinder cleaners; they said they met the same
needs and were intended for the same purposes. They pointed out that they
had not compared their cylinder vacuum cleaner with other forms of cleaners,
such as uprights, handhelds, or wet and dry cleaners, and the Dyson model
chosen for the tests was Dyson's top of the range, leading product. They
believed it was the fairest and most relevant Dyson vacuum cleaner with
which to compare their cylinder vacuum cleaner. They believed the dust
pick-up test was the most relevant and fair measure for comparing performance
between vacuum cleaners, particularly when using carpets. They believed
dust pick-up was the main purpose of a vacuum cleaner and pointed out
that they had clearly labelled the graph as a dust pick-up test.
Dyson sent independent test results, which they said showed the difference
in performance between the DC08, the DC11 and the Miele cleaner on different
surfaces. They believed the results showed the DC08 had superior pick-up
performance on carpet to both the DC11 and the Miele machine.
We understood from the independent expert that the Dyson DC11 was oriented
more towards fibre pick-up than dust removal, and that the DC08 not only
had more suction power than the DC11, but also had a pure suction nozzle
that was better at removing dust from carpets than an air turbine nozzle.
We therefore considered that, in an ad that focused on dust pick-up from
carpets, the DC08, not the DC11, was the most comparable cleaner to test
against the Miele cleaner. We concluded that the graph could mislead readers
and told Miele not to repeat the approach in future ads.
On these two points, the ad breached CAP Code clauses 7.1 (Truthfulness),
18.1 (Comparison) and 18.2 (Fair Comparison).
3. Complaint upheld
Miele said their test results showed that their cleaner delivered consistent
dust pick-up performance over the 12-year test period and they therefore
believed the graph was accurate.
We understood from the independent expert that the performance of Miele's
vacuum cleaner would vary as the bag filled up and, although the line
on the graph was thick enough to cover some variation in performance,
that was not made clear in the text of the ad. We also understood that
the definition of a ‘full’ bag that Miele adhered to was not
a generally agreed one and would not suit the variety of sizes and filtration
methods of all vacuum cleaners. We therefore concluded that the graph
could mislead readers by erroneously implying Miele's cleaner provided
constant performance.
On this point, the ad breached CAP Code clauses 3.1 (Substantiation) and
7.1 (Truthfulness).
4. Complaint upheld
Miele repeated that the DC11 was the fairest and most relevant cleaner
to use in comparison with their cylinder cleaner. They pointed out that
the test results clearly showed that the DC11 left behind more dust over
the 12-year period than the Miele cleaner. They believed Dyson's own tests
showed the DC08 had a similar performance level to the DC11, and independent
consumer tests showed the Miele cleaners out-performed both the DC11 and
DC08.
Because we accepted, in the context of this ad, that the DC08 was more
comparable with the Miele cleaner than the DC11, and we understood from
the expert advice that the independent test results sent by Dyson showed
the DC08 would pick up more dust over 12 years than the Miele cleaner
and the DC11, we considered that the implication of the graph and the
image of the pile of dust that Miele's cleaner outperformed the most comparable
cleaner on dust pick-up was misleading. We told Miele not to repeat the
approach in future ads.
On this point, the ad breached CAP Code clauses 7.1 (Truthfulness), 18.1
(Comparison), 18.2 (Fair Comparison) and 18.3 (Objective comparison).
5. Complaint upheld
Miele repeated that the DC11 was the most relevant cleaner to use in comparison
with their cylinder cleaner. They said the claim ‘first class’
had been verified by the independent tests carried out by various consumer
bodies and magazine vacuum cleaner reviews had rated Miele at the top
of all the products on test, with best in test performances for dust pick-up
and overall score; they pointed out that Dyson's DC08 was rated well below
Miele's cleaner in those independent tests.
We considered that, in the context of an ad promoting the dust pick-up
qualities of Miele cleaners, readers were likely to interpret the claim
‘first class performance’ to mean that Miele's cleaner out-performed
the most comparable Dyson cleaner on dust pick-up. We noted the magazine
reviews rated Miele's cleaner top in its class across a variety of relevant
categories but, because we understood from the expert that the DC11 was
not the most comparable cleaner for testing dust pick-up, and the more
comparable DC08 out-performed Miele's cleaner on dust pick-up, we concluded
that the claim, in the context of this ad, could mislead readers. We told
Miele not to repeat the claim in future dust-pick-up ads.
On this point, the ad breached CAP Code clauses 3.1 (Substantiation),
7.1 (Truthfulness), 18.1 (Comparison), 18.2 (Fair Comparison) and 18.3
(Objective comparison).
6. Complaint upheld
Miele said the test method was reliable and was carried out in accordance
with internationally recognised standards; they pointed out that the protocol
was clearly described in the copy of the ad. They also said Dyson used
the same test method and believed it was an industry standard that all
manufacturers, test houses and institutes and consumer bodies recognised
and adhered to. They said the products tested were used and maintained
exactly according to the manufacturers' instructions; they pointed out
that Dyson's user guide described their filter as a ‘lifetime’
filter and made no mention of the need to change it, nor did it include
instructions on how to change it. Miele said they believed a filter described
as ‘lifetime’ should not need replacing. They also pointed out
that Dyson's website stated that the filter ‘never needs replacing’.
They accepted that there was not a specific Standard for lifetime testing,
but believed that by using the British Standards test to measure dust
pick-up from carpets, repeating it over a simulated 12-year period, and
by describing the protocol in the body of the ad, they had created a reliable
method for testing dust pick-up performance over the life of a product.
We understood from the expert that the two test methods used by Miele
were internationally accepted as viable tests and, although the use of
both in this combination was neither supported nor rejected by IEC protocols,
the methods had been clearly identified and were not invalidated by being
used in combination. However, we also understood from the expert that
Miele had not followed the correct protocol in one of the tests and, although
the expert could not be sure whether the changes would be to the advantage
or disadvantage of Dyson, we considered that it raised sufficient doubt
about the test results as to render the ad misleading. We told Miele to
ensure that, in future, they only advertised test results for which they
had followed the correct procedures.
On this point, the ad breached CAP Code clauses 3.1 (Substantiation),
7.1 (Truthfulness), 18.1 (Comparison), 18.2 (Fair Comparison) and 18.3
(Objective comparison).
J.E.M
Marketing Complaint Upheld
A
complaint objecting to a direct mailing for various products, including
a water conditioner, from J.E.M Marketing, Cranleigh, Surrey was upheld
according to information published by the Advertising Standards Authority
(ASA).
Ad
A direct mailing for various products, including a water conditioner,
stated ‘ ... Scale Beater NO plumbing required ... immediately prevent
the build-up of limescale in your home and over time it can help to reduce
existing limescale build-up. Scale Beater seeks to prevent limescale build-up
by producing a very powerful magnetic field which keeps harmful calcium
in suspension, preventing the formation of new & additional scales
in your pipes and appliances ... ‘.
Issue
The complainant challenged the efficacy of the product and in particular
the claims:
1. ‘immediately prevent the build-up of limescale in your home’
and
2. ‘keeps harmful calcium in suspension, preventing the formation
of new & additional scales in your pipes and appliances’.
The CAP Code: 3.1;7.1;3.2
Response
J.E.M Marketing (JEM) said they had not received a complaint about the
product before. They said they had sold over 2,000 units and had had fewer
than two per cent returns. As substantiation for the efficacy of the product,
JEM sent numerous testimonials on magnetic water softeners and information
from British Water, a trade organisation that included manufacturers and
marketers of these devices among its members, on how physical water conditioners,
including the magnetic type such as Scale Beater, worked. They also sent
a copy of a paper from Rand Afrikaans University titled ‘The effectiveness
of a magnetic physical water treatment device on scaling in domestic hot-water
storage tanks’ which showed that a permanent magnet was effective
in suppressing the mass precipitation of scale. They pointed out that
the magnets used for the experiment were 129m Tessla and explained that
the magnets used in their device was much stronger with a power of 1100m
Tessla. JEM also sent a copy of suggested amendments to the text.
Assessment
Upheld
The ASA noted JEM had submitted a scientific paper on the efficacy of
a permanent magnetic device in a domestic situation and that the Scale
Beater used stronger magnets than those in the test. We took independent
expert advice and understood, however, that the conditions of installation
were dissimilar. The expert explained that the scientific paper submitted
showed scale deposition over time and not reduction of existing scale.
The expert further explained that, although there was anecdotal evidence
that devices such as the scale beater worked, there was insufficient understanding
and testing to support a de-scaling effect as claimed. We noted these
devices had the support of British Water, but with the caveat of Antiscale
Magnetic Treatment (AMT) devices being capable of operating in some cases
and not operating in others. We concluded that JEMs submission was insufficient
to demonstrate that the device would be effective at preventing the build-up
of limescale in real life, single pass domestic systems or that the device
kept calcium in suspension as claimed in the ad.
On points 1 and 2, the mailing breached CAP Code clauses 3.1 (Substantiation)
and 7.1 (Truthfulness).
Action
We told JEM to remove all claims from the ad that implied the device was
effective at preventing the build-up of limescale in real life, single
pass domestic systems or that the device kept calcium in suspension. We
told them to take advice from the CAP Copy Advice team before distributing
future marketing material for this product.
Adjudication of the ASA Council (Non-broadcast)
Investment
in Homag puts S.W. Watson Ahead
Preston
based S.W. Watson & Son was formed in 1967 as a specialist joinery
company primarily serving the shopfitting and retailing sectors.
Steady
progress and expansion saw the company move to a purpose built 10,000
sq feet factory and showrooms in 2004 with the intention of introducing
new and automated technology to better serve its growing customer base
in terms of quality, capacity and service.
Managing Director Paul Watson says that investment in state-of-the-art
computerised production systems have allowed the company to significantly
broaden its design-delivery capability and offer customers a far broader
spectrum of choice at competitive prices. ‘Our production and management
teams have the experience necessary to deliver very high quality products
with the ability to meet the strictest deadlines often undertaking multiple
site roll-outs throughout the UK.’
Typically these would be for long standing customers like Matalan and
other household blue chip names like Poundstretcher, JJB Sports and ASDA.
Products are widely varied but include reception counters, display counters,
tills, display panels, display units, plinths and fixtures & fittings.
But recent investment in key Homag Group equipment - particularly the
Homag BAZ CNC stationary processor - has given S.W. Watson the capability
to manufacture batch or bespoke shaped components for manufacturers especially
items like desk tops for the office furniture sector as well as many other
specialised components.
S.W. Watson's recent investments with Homag U.K. have included the BAZ
machining centre which is able to shape, drill and accurately edge shaped
components in a single clamping. Also a new Homag single-sided high speed
edgebander with a Ligmatech ‘Boomerang’ panel return device
for efficient one-man operation. They also operate a Weeke CNC BHC machining
centre for routing and drilling flat panels. ‘Over the years we have
had good experience with Homag Group equipment, especially edgebanders’
explains Paul Watson. ‘With the latest investments in the BAZ and
edgebander we undertook wide ranging research but were satisfied that
Homag Group engineering and performance gave us a superior, reliable and
flexible capability. Also, the Homag U.K. service infrastructure, training
facilities and technical back-up is second to none.’
The new technical capability at S.W. Watson has recently given the company
a very unusual opportunity to become the current nominated sole manufacturer
of the patented Stâkm range of products for retail display. Stâkm
is a design of inter-locking panels that can be built up into a huge variety
of designs and rely on their increasing pressure of weight to create a
stable unit. This unique system requires no fixings or fittings. Precision
is the key to manufacturing the MFC components and indeed edging them.
This is provided by the Homag BAZ which has been adept at adapting to
accepting complex programs via its WoodWop software which Paul Watson
says his operators have found easy to master.
S.W. Watson has proved itself as a competent new breed of specialist panel
component manufacturers able to adapt customer designs quickly and efficiently
into a precision and quality delivered product. The company’s relationship
with Homag has been a key element of this.
Six
Million Workers Set to Benefit from Extra Holiday Entitlement
Jim
Fitzpatrick, Employment Minister, yesterday announced the Government's
proposals to increase workers' holiday entitlement from 20 days per year
to 28.
New research has shown that up to six million workers would benefit from
an extra eight days holiday each year under the plans. Some employers
currently include the eight bank holidays as part of workers' 20-day annual
leave entitlement (pro-rata for part-timers).
The Department of Trade and Industry (DTI) is launching a second public
consultation on the implementation of the changes. Statutory annual leave
entitlement would be increased in two stages, rising from 20 to 24 days
on 1st October 2007, and from 24 to 28 days on 1st October 2008.
Research by the DTI found that groups standing to benefit most from the
changes include women, part-time workers, low-paid workers and workers
from minority ethnic communities.
The move would protect vulnerable workers and allow reputable companies
to compete on a more level playing field with those companies that give
employees only the minimum of holiday entitlement.
Jim Fitzpatrick, DTI Minister for Employment Relations, said:
'Most companies already recognise that good holiday provision makes good
business sense. Holiday entitlement can be a key factor in recruiting
and retaining staff. Holidays are also important for productivity as they
help minimise sick leave and keep people motivated and refreshed.
'We've worked closely with business and have wanted to make sure that
they have time to prepare for the changes.
'People work hard and they deserve a decent break. We want to make sure
everyone gets the holiday they are entitled to.'
An increase would move UK workers' annual leave entitlement closer to
that of workers in other European countries, where holiday allowance is
typically more generous. Compared with the current minimum allowance of
20 days in the UK, for example, workers in Ireland are entitled to 29
days; the highest minimum entitlement is in Austria at 38 days.
The DTI has already consulted widely on the increase and has sought the
views of business and trade bodies. The cost to business is expected to
be around 0.4% of the wages bill.
CC
Publishes Final Report on Classified Directories
The
Competition Commission (CC) has recently published its final report into
the printed classified directories market. Yell, the publisher of Yellow
Pages, will be required to comply with a number of restrictions, including
a price control of RPI-6 per cent until March 2008 and RPI from that date
onwards.
Chairman of the Inquiry Group, Diana Guy, said:
'Whilst Yell still holds a powerful position in this market, our measures
focus on the future and take into account the expected emergence of greater
competition and the extent to which prices have reduced as a result of
the existing price cap.
'Yell's prices will be reduced until March 2008 following which any rises
will be capped at RPI. We expect growing competition will increasingly
constrain Yell's prices and that Yell will feel more pressure due to the
Internet. In the meantime the price control will prevent Yell from exploiting
its market power.
'The other measures are designed to preserve developing competition from
actions that could be targeted at competitors. This is a changing market
and so we have recommended that the Office of Fair Trading review these
remedies after three years.'
The final report, which is published at http://www.competition-commission.org.uk,
concludes that Yell has market power as a result of its strong brand and
network effects. Prices have been largely constrained by the existing
price cap rather than competition. Were it not for the price cap, customers
of Yell would be paying more for advertisements in Yellow Pages than they
would if the market was functioning well.
Whilst BT's entry into the market offers the prospect of stronger competition
to Yell, the pace of its future growth is unclear and the extent to which
its presence will translate into a significant constraint on Yell's prices
remains uncertain. The CC expects that advertising on the Internet will
increase in the future and that printed directory advertising may decrease.
At present, however, limited numbers of customers are switching their
spend from printed directories to the Internet and classified directories'
revenues have continued to increase over the last five years.
The main remedies are as follows:
Price Control
* Yell's Yellow Pages advertisements will be subject to a price control
of RPI-6 per cent until 31st March 2008 and thereafter RPI.
* This price control will apply to each type of advertisement.
* Volume discounts will be permitted provided they are published and available
to all advertisers.
Local ('second-tier') directories
* Yell is no longer to be prevented from publishing second-tier directories,
but will be subject to certain restrictions, namely circulation of each
such directory will be capped at 25,000 and its distribution area must
account for no more than 15 per cent of the area of the corresponding
Yellow Pages directory.
Themed guides
* Yell may publish themed guides (ie guides on particular topics) provided
these contain only a limited number of classifications.
Duration
* The CC recommends that these remedies are reviewed by the Office of
Fair Trading (OFT) after three years.
Other matters
* Yell must publish a comprehensive rate card.
* Yell must prepare accounts for the OFT of its UK printed regulated directory
business.
* Yell must comply with a good faith provision to ensure that the objectives
of the remedies package are not circumvented.
What
the Colour of your Décor and Furnishing says about You
Researchers,
designers and buyers at one of the UK's leading independent furnishing
retailers have come up with the definitive guide on what décor
and colour says about the householder.
Manchester-based Housing Units set a team the task of scouring the internet
for the mean average of experts' views on what a saffron sofa, a blue
bed, white wardrobe or red carpet reveals about the personality of the
purchaser.
'It was curiosity as much as anything else, but we turned up some interesting
views on matching people's personalities and characters to the colours
in their homes,' said Nick Fox, a director of Housing Units.
'If red figures highly, then we're talking about an energetic person.
Red is bold, warm and sensuous - it's stimulating and gives off high energy.
People who like red might be, or might like to let others believe that
they are ambitious and impulsive, brave and courageous high achievers
and risk takers.
'But black is king. Black completely overwhelms all other colours. It
says power and mystery, 'this house is owned by somebody who has enormous
depths'. Black is confidence and says 'I'm top of the tree'.
'White is a different matter. Research says that white is linked to innocence
and purity. People who favour white might be dreamers, with an eye on
the big picture or possibly searching for a bigger connection to life.
'Silver - or lots of chrome and shine about the place - says the resident
is a communicator, someone who inspires trust. He or she may well also
be someone who reacts to instincts, and trusts those instincts.
'Green, and its shades, is a friendly, calming colour, especially in current
times and with its connection to the environment. Green brings to mind
nature - grass, trees, plants. People who choose greens might be extremely
observant, seeing details that others overlook.
'Blue is an emotional colour - it promotes cool and calm, relaxation and
tranquility. If you have blue about the house then you're likely to be
loyal, and you will most likely value affection,' said Nick.
At the other end of the scale, orange and yellow are all about flamboyant
and spontaneous personalities 'They're fun colours: they say 'look at
me', but are also likely to be the most frequently replaced shades - not
necessarily because of the brightness, but sometimes because of the fickleness
of the homeowner.
'Bright yellow suggests a wide-ranging personality, open to challenge
and activity - orange is a happy colour that promotes good humour.'
Housing Units - known for its top-hatted doormen - was established in
1947. It is a family-owned furnishings retailer based in Failsworth to
the north of Manchester. It stocks 30,000 high-quality lines across a
range of departments in two buildings and prides itself on its unique
style of customer service, the value of its goods and the shopping experience
it provides.
Web: http://www.housingunits.co.uk
OFT
Consults on Draft Guidance about New On-Site Inspection Powers
The
OFT is consulting on its draft Guidance about new on-site inspection powers
which came into force on 8th January 2007. These powers have been introduced
as part of the UK implementation of the EU Regulation on Consumer Protection
Co-operation (CPC).
The CPC establishes a network of public consumer protection bodies across
the EU (CPC Enforcers), each with powers to co-operate and share information
for the purpose of enforcing EC legislation. The OFT is responsible for
coordinating the application of the CPC within the UK. The CPC also sets
out the minimum enforcement powers that CPC Enforcers must have, and obliges
them to take appropriate action on behalf of consumers in other European
Member States when requested to do so.
The new on-site inspection powers can be used if there is a reasonable
suspicion that a business is or has been breaching European consumer protection
law, and to investigate whether a business is or has been failing to comply
with an enforcement order. These powers can be used without advance warning
provided a warrant has been obtained from a Magistrates court. If an inspection
is conducted without a warrant, then the business must be given at least
two days' notice. These powers can be used by a number of public bodies
including the OFT and Local Authority Trading Standards Service.
All stakeholders, including business and consumer representatives and
other enforcement bodies, have been asked to give their views on the draft
Guidance. The Guidance outlines the scope of the new powers, as well as
the rights and obligations of a business when an inspection is conducted.
Ali Nikpay, OFT Senior Director of Advisory, Policy and International,
said:
'The OFT welcomes the new powers, which the CPC has given us to deal with
traders who con or mislead consumers and try to get away with it by hiding
behind borders. Our draft Guidance explains how we will use our powers
to undercover unscrupulous traders so consumers can have greater confidence,
while legitimate businesses are protected from rogues in the marketplace.'
Hardworking
Mums are estimated to spend 66 hours every week on household jobs!* So
raise a glass to Mum with Whirlpool, this Mother’s Day, 18th March
2007.
Thank your Mum by serving her a crisp glass of wine or even champagne,
at the perfect temperature from Whirlpool’s ARC2050 wine cellar,
which stores wine on oak shelves at optimum serving conditions. The ARC2050
holds up to 111 bottles, so stock up your Mum’s favourites and she’ll
have a glass to hand whenever she wants one!
*Legal and General ‘Value of Mum’ survey 2006.
Web: http://www.whirlpool.co.uk