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How a very British oven plans on reinventing itself for China
May 23, 2013 -- Updated 1649 GMT (0049 HKT)
- Britain's troubled housing market hit sales of the sturdy oven hard, CEO William McGrath told CNN
- In 2012 sales dipped 2.5%, but with cost-cutting the company has managed a 12% jump in pre-tax profit
- AGA Rangemaster looking to China -- the world's second-largest economy -- as next growth market
(CNN) -- The AGA Rangemaster may be a quintessentially British cooker, but demand has slumped amid the UK's recession. Now, the cooker that has been at the heart of British kitchens since the 1930s, is looking overseas for its profits.
Britain's troubled housing market hit sales of the sturdy oven hard, the company's chief executive William McGrath told CNN. Sales fell and the company cut jobs.
Read more: Patek Philippe boss: Quality is more important than growth
"The level of housing transaction is well under half the level it was back in 2007 and 2008, so, really we have seen a flat-lining period," McGrath said.
"There is a correlation between house sales and purchases for your kitchen; indeed, you are most likely to spend money on your kitchen in the six months or so after you move house," he said.
Read more: Europe's new threat: Slow decay
In 2012 sales dipped 2.5%, but with some rigorous cost-cutting the company has managed to post a 12% jump in pre-tax profit.
"From the peak we have lost around 600 people," McGrath told CNN. The move has saved the company around $27 million, but to sustain profits they're looking to new markets.
The company sells 37% of all its products to North America, but it expects this number to increase to half of all its sales. It also plans to launch in the Chinese market.
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"In China there are very few cookers," says McGrath. "The cooker doesn't really exist as a product category, so we're talking about the potential for a whole new product category which will hopefully take China by storm."
Moulding the Chinese consumer into one with British tastes is an ambitious strategy. The Chinese buyer, used to steaming, boiling and frying food on a gas burner, may need some persuading to consider a giant cooker complete with roasting and baking ovens.
Read more: GE Europe chief eyes investment in Germany
Chinese houses could also cause issues for the company's strategy. Chinese kitchens are often small and in high-rise buildings -- creating a squeeze for a cooker which is between 90 and 110cm wide and weighs around the same as a baby elephant.
But McGrath is optimistic, demonstrating to CNN how a wok can be used to stir-fry on the rangemaster's hot plate.
"As we found in Britain in the 1930s, there's the evolution in the nature of the Chinese kitchen, maybe moving from a galley kitchen to something's that is more the heart of the home," McGrath said.
Home is where the heart is, and increasingly this will be overseas for AGA Rangemaster. While it weathers the storm in Europe, it'll try to cook up a storm in China.
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