Gorenje, the manufacturer of home appliances, has its headquarters in Velenje, Slovenia, and is considered one of the top European and worldwide manufacturers of home appliances, which they manufacture in three countries - Slovenia, the Czech Republic and Serbia.
The Group, which employs 11 thousand people and last year created 1.34 billion revenue from sales in 90 international markets, also has high expectations of the US market. In the US, they are already present through Asko, a premium brand originating from Sweden. The origins of the brand go back to the 1950s, when a farmer from the Swedish town of Vara built a washing machine for his mother, as she was too poor to afford to buy one from the store. The Gorenje Group took over Asko in 2010.
The Dom Gorenje Group at the moment creates 86.8 percent of its revenue with its primary business, and by 2020 plans to increase this proportion to 92 percent. With the sale of premium and innovative products, their primary business last year produced 27.3 percent of its revenue and by 2020 the Group plans to increase this to 30 percent.
The Asko premium brand, which previously had a 10.1 percent share in its primary business, Dom, will by 2020 contribute 14.3 percent, or 230 million euros, which is twice as much as last year. We discussed Asko’s results and plans in the American market with a native Italian, Matteo Camesasca, the Executive Director and Head of the Asko Division of the Gorenje Group.
The European home appliance producer Gorenje Group of Slovenia, with more than 1.34 billion USD of sales, is selling its product in 90 markets globally. Which markets are the most important?
The Gorenje Group’s key markets are Germany, Russia and the Netherlands. In 2016, the Gorenje Group generated 48 percent of core revenue in the region of Eastern Europe, followed by 41.8 percent core revenue generated in the region of Western Europe, while the rest of the world accounted for 10.2 percent.
Compared to 2015, we saw a 3.4 percent growth in revenue in all geographical segments and with all brands in 2016. In Western Europe, our sales increased in the Benelux markets, especially in the Netherlands, where our market share is rapidly increasing. In Germany, we succeeded in increasing our sales. Our revenue was also higher than the previous year in many Eastern European markets and other markets outside of Europe. After harsh economic conditions in 2015, sales in the CIS region (Commonwealth of Independent States) were stabilized and grew by 12.3 percent in 2016.
How important is the US market for the Gorenje Group in general? How big are your sales in the USA currently?
We are currently present in the US market through the Asko premium brand of home appliances. Asko creates approximately 20 per cent of its sales in the American market. Scandinavia represents around a 30 percent share of sales and Australia accounts for 35 percent of Asko’s sales. Asia is among the markets in which our sales are currently on the rise.
North America is an important market for us today and will be in the future, as Asko is consolidating and advancing its position in the premium and high-end segment.
With a notable presence and growing profitability in Scandinavia, Australia, and the USA, the Asko brand is also gaining traction and muscle in mature markets such as Italy and France, as well as in the emerging Asian markets, the Middle East, Africa, and South America.
By increasing our sales under the Asko brand, we are increasing sales in the premium segment. Regarding the structure of sales in the Gorenje Group’s core activity segment, Home, sales of products under the Asko brand accounted for 10.1 percent in 2016 and, in the overall revenue structure of the Gorenje Group, Asko has an 11.4 percent share. Within the structure of our sales revenue premium appliances account for a 27.3 percent share.
In 2010 the Gorenje Group bought the Asko brand. What did the Slovenian manufacturer of home appliances gain with this acquisition?
The Asko brand, a typical Scandinavian brand, has an interesting story. Its beginnings go back to the year 1950, when a Swedish farmer from the town of Vara hand built a washing machine for his mother. He was saddened by the fact that she could not afford to buy a washing machine from a store. The machine which he built for his mother was so good that the same manufacturer whose washing machine the farmer’s mother could not afford, immediately begun selling it.
As is most commonly the case with Scandinavian brands and Scandinavian companies in general, Asko focuses on the quality and perfection of its products and the durability and longevity of their functionality, and since the very beginning has been environmentally friendly.
In addition, Asko products have always been built to last. The company never tries to cut corners on the materials used, its plans and production or design. Asko products have, from the very beginning, been designed in a way that made them suitable for a beautiful Scandinavian home. But most of all, they have always done their job, washing laundry, extremely well. At Asko they have managed to maintain this kind of mentality to perform exceptionally throughout their history. Even in 2010 when they were bought by one of the world’s leading manufacturers of home appliances, the Gorenje Group.
What did the Asko brand gain due to the new ownership?
The Gorenje Group is considered to be one of the world’s most important manufacturers of home appliances, with a long tradition and a presence in 90 different markets. What’s even more important, they benefit from a high level of technological knowledge and skill, even in the high price range.
Asko and its design and development remain Scandinavian. It became part of a group that ensured they could continue providing consumers with premium products. In effect, the promise of the brand can’t be broken. A brand belonging to a higher price range, promising quality, durability and excellent functionality and use of the best materials, must keep such promises.
How long has Asko been present in the USA?
Asko entered the US market 30 years ago in 1987. Up to 2013 we were present in the US with our distribution company and since 2014 we market our washing machines, dryers and dishwashers in North America through our exclusive partner, the Sub-Zero and Wolf (SZW) Appliances Group.
How did the cooperation between the Asko brand and the Sub-Zero and Wolf Group start?
Sub-Zero and Wolf is extremely well known and highly regarded in connection to luxury brands in North America. Establishing the partnership with SZW was of mutual interest to both sides and it was a long process; the first meeting was in June 2012 and we signed the contract in December 2013. The co-operation started in April 2014.
In addition to their refrigerators, freezers and fridge-freezers under the Sub-Zero brand and the cooking appliances of the Wolf brand, Sub-Zero and Wolf now exclusively represents Asko washing machines, dryers and dishwashers and now offers a complete selection of prestigious home appliances.
In doing so the company cooperates with 22 distributors. These distribute the products to a thousand stores selling home appliances and to 500 stores specializing in selling kitchens. Asko products are available in 1500 different locations throughout the USA and, in addition to the classic American sized appliances, customers also get to experience our appliances, which come in European sizes.
What is the interest of American consumers in appliances with European dimensions, as these, when compared to the American appliances, are significantly smaller in size?
The interest in home appliances with European dimensions in the US is increasing, mostly in urban centers where space is a very precious and valued commodity.
But despite appliances being smaller in size, the consumer expectations remain the same and are still high. You have to be aware that the American market is considered one of the most demanding in the world. American consumers are very demanding when it comes to the efficiency of performance of home appliances and the Asko brand meets their demands completely. Not only regarding the performance, but also in terms of logistics, after-sale services, maintenance, repairs... All of these have to be exceptional when it comes to a premium brand.
One of our advantages is the fact that we help customers save space, which is especially important in apartments. Our Swedish development and design team has managed to develop a washing-drying system that, in just 0.7 square meters of space, offers a drying wardrobe with a fan, which is the same height as the cooling closet and allows fast drying of clothing. For example, sports equipment and children’s clothes that get wet during play. All of this in just 0.7 square meters of space!
Think about what this means in New York, where a square meter of apartment costs 20 thousand dollars! Or in Japan, where space reserved for home appliances is also very limited.
It’s interesting to go through the advertisements for apartments in New York and find in the descriptions mentions of Sub-Zero, Wolf and Asko. These increase the value of a property due to the prestige they carry in their name. The price of such an apartment can increase by as much as 50 thousand, or even 100 thousand dollars.
How did you use the information published in Cottages & Gardens, describing how the 1.16 million dollar ranch bought by the former US president Bill Clinton and his wife was equipped with Sub-Zero and Asko appliances?
We are, of course, aware of what was published in Cottage & Gardens but we tend not to use this sort of information as an argument for enticing sales. We can also often find other examples of celebrity homes and the homes of famous sportsmen and coaches equipped with appliances made by Sub-Zero, Wolf and Asko. But we never promote these sorts of things. It’s just not our style.
What plans does the Asko brand have for the American market in the future? Is the goal of the Gorenje Group effectively to double the worldwide sales of the Asko brand to 230 million dollars?
Our goal is also to double our sales in the US. As stated earlier, Asko currently generates approximately a fifth of its sales in North America. A fifth of our revenue will also be generated here by 2020. With partners like Sub-Zero and Wolf, which focus entirely on business, details, customers and excellence in every aspect of performance, which is something Asko themselves are known for, we are certain to achieve the goals we have set. This is, of course, with the help of our partners, who increasingly recommend our products to customers at the point of sale.