Husqvarna President: "Business As Usual" in Wake of Separation from Electrolux

Almost 30 years after Electrolux bought Husqvarna, with world headquarters in Huskvarna, Sweden, it was announced that Electrolux intends to separate Electrolux Outdoor Products by dividending it to shareholders. The news was released in a letter from Zerfoss to Husqvarna’s dealers last week.

Electrolux Outdoor Products includes a professional products division with major brand names such as Husqvarna, Jonsered, Partner and Dimas aswell as a division of consumer products with major brand names including Husqvarna, Poulan, Poulan Pro, WeedEater and Flymo. Zerfoss says each brand will retain its brand identity and dealers and consumers should expect all brands to "continue to operate as they have been."

The new outdoor products-focused company is expected to be listed on the Stockholm stock exchange no later than mid 2006. Zerfoss says the process of becoming an independent company should take about 16 months, which includes a two- to three-month period during which the new company will have to report to the Stockholm stock exchange as its own entity.

In his letter to Husqvarna dealers, Zerfoss states, "The name of the new company will most likely be Husqvarna as Husqvarna is our strongest and most well-known worldwide brand."

In an exclusive interview with sister publications Commercial Dealer and Lawn & Landscape magazines, Zerfoss added that the new board, once chosen, will vote on the name. The new company is expected to have annual sales of approximately $3.7 billion and 12,000 employees worldwide. Zerfoss added that he expects some of the new company’s central staff to be carried over from the current Electrolux staff.

The letter states that the reason for the separation is that Electrolux wants to concentrate on its core business of indoor products and appliances while giving the outdoor business "the opportunity to focus on its own continued development and success."

Zerfoss expanded on that information in the interview. He says the appliance end of Electrolux's business is currently facing challenges from low-cost competitors, deflation and higher demand for premium products at lower prices.

"When you’re serving two different industries, it does take away some of that focus. This just defines that understanding the companies leaders understand this," Zerfoss says. "It’s a win-win for our stockholders and it’s a win-win for us as equipment companies. We will not be distracted by the things going on on the appliance side of the business and they will not be detracted by what’s happening on our side. At the end of the day, it’s going to provide more focus and more investment on a day-to-day basis."

"This will strengthen us as a company," Zerfoss writes in his letter. "As a Husqvarna dealer, you will be able to benefit from this new, focused company as we will increase our investments in product development and marketing/brand building."

Zerfoss says that the forestry and commercial landscape equipment markets are growing and that the brands under the new Husqvarna umbrella plan to continue as a viable components to that growth. "Our commercial dealers are our forte and we will focus on that," he says. "Our whole focus now is outdoor power equipment."