Kleenmaid appliances back on sale – but can the brand really be resurrected?

Kleenmaid appliances will be back on sale to the public this weekend, just under 12 months after the Brisbane-based company collapsed with 10,000 creditors.

Sydney private equity firm Compass Capital Partners, which acquired Kleenmaid’s intellectual property and brand last year, will open a clearance centre in the Sydney suburb of Banksmeadow on February 20, with $2 million worth of appliances on sale.

And in a bid to win over some of those homeowners left stranded when Kleenmaid collapsed with their deposits, Compass will offer those buyers a special discount on goods.

Compass chief executive Danny Hamilton told SmartCompany this morning that the company had honoured Kleenmaid’s orders with appliance manufacturers and would be selling these 2009 models from the clearance centre, with a focus on helping out former customers first.

However, as Compass does not have access to Kleenmaid’s customer list, it could only try to attract former customers via its website and through the clearance centre.

The company is also selling new two-year warranties on a range of Kleemaid appliances for former customers whose warranties were voided when the company collapsed.

“I’m in the same boat,” Hamilton says. “I’ve got Kleenmaid throughout my house and haven’t been able to get warranties. Now for a small amount of money you can warrant a number of appliances.”

He says Compass is off to a great start, having already taken 15 orders from former Kleenmaid customers.

Once the 2009 stock is sold off, Hamilton will settle down to the longer-term project of restoring the reputation of the Kleenmaid brand.

Unlike the previous owners of the brand, which operated about 25 retail stores around Australia, Hamilton is switching to a model by which appliances will be sold through existing national whitegoods retailers.

“We don’t want to be in retailing. Our assessment of the previous Kleenmaid is that the overheads swamped them. “

“We’ve got 2010 stocks being built to showcase to the retailers in March and then hopefully we’ve get the stock on the floor by May or June.”

Hamilton knows he faces a tough challenge, but believes that Kleenmaid products have a reputation for quality and innovation that has not been destroyed by the collapse of the former operators.

“It’s all about the brand, the brand, the brand – the innovation and the quality that the brand was famous for. Not a soul in the world says the product is shoddy. “

Pricing may also help entice buyers back. Hamilton says the company will be able to offer prices 10-15% lower than previously, due to the company’s lower overheads and the fact it will not offer a 10 year warranty as the company did in the past.

But can the brand really be resurrected? Brand expert and SmartCompany blogger Michel Hogan says yes, but there is one big caveat.

“For them the big question is, how fresh are people’s memories?” she says.

Hogan says that operationally the company is doing everything right by changing its business model, honouring deals with manufactures and trying to repair relationships with former customers, although there is some question as to how forgiving these buyers will be.

“It’s only been 12 months since that company went down, so it’s still very fresh in the market’s mind. And the disappearance of a brand doesn’t leave a vacuum. Other manufacturers moved in and take that space in the marketplace.”

Hamilton sees the Kleenmaid resurrection as a three to five year project, a typical timeline for a private equity firm.

He says it’s worth remembering that the brand was generating sales of $80-90 million before its demise.

“If you got in 50 major retailer stores you’d be caning it,” he says.