Home appliance manufacturer Breville Group Ltd. has completed a capital increase, raising A$94 million of new shares. While only equivalent to 3.7% of the company's market capitalization as at May 18, according to S&P Global Market Intelligence data, the timing is notable in coming amid the coronavirus pandemic.
As outlined in Panjiva's research of May 18, the electrical appliance and consumer electronics industry in the U.S. — North America represented 58.3% of sales in the most recent financial year — has faced demand challenges, albeit with some switching to e-commerce away from traditional retailers.
Breville's U.S. business likely saw a rapid period of expansion in 2019, with linked U.S. seaborne imports increasing 37.8% year over year, Panjiva's data shows. That included a 41.1% surge in shipments from China despite the application of wide-ranging tariffs.
Perhaps unsurprisingly, that has slowed in 2020, with imports in the first quarter having fallen by 4.4% year over year including an 18.7% slide in shipments from China as supply chains were disrupted by coronavirus.
A similar development has been seen in April with a 27.8% slump in total volumes shipped including a 34.2% drop in shipments from China. Imports from Europe have continued to expand, rising 51.4% in the first quarter and by a further 26.1% in April despite the widespread industrial lockdowns in Europe.
Breville's downturn in the first quarter and April has been somewhat faster than the industry average. Panjiva's seaborne data shows imports of similar products fell by 29.3% in the first quarter and by a further 17.5% in April. The fastest rate of decline may have been experienced by Newell Brands Inc.'s Sunbeam, with imports linked to the firm having fallen by 67.1% year over year in April after a 46.2% drop in the first quarter.
Shipments linked to Samsung Electronics Co. Ltd. and Spectrum Brands Holdings Inc. meanwhile have been more robust, rising by 0.8% and 1.8%, respectively, in April. While that may position the companies to take market share, it may come at the cost of elevated inventory costs until retail spending returns to full speed.
Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.