Electrolux to Rebrand With a Swedish Vibe

(Bloomberg) -- Electrolux AB has revamped its marketing message, stealing a page from fellow Swedish brands Volvo Cars and Ikea that highlight progressive Nordic values like sustainability, safety and simplicity.

The fresh approach coincides with a renewal of Electrolux’s lineup of stoves, refrigerators and other appliances, as well as trade and tariff turmoil that’s forced the 100-year-old company to raise prices.

“Historically we haven’t been very clear on where we are from,” Chief Executive Officer Jonas Samuelson said in an interview at the company’s headquarters in Stockholm. “Making sure that we communicate that is so obvious that it’s almost embarrassing that we haven’t done that in the past.”

Electrolux is facing a major transformation as it faces “unprecedented” headwinds including tariffs that increase the costs of components and some finished goods such as microwave ovens and air-conditioning systems, the CEO said. Sweden’s wholesome image remains a marketing opportunity, as Volvo Cars and furniture-store Ikea have shown, while its progressive stance toward topics ranging from immigration and feminism to climate change hold appeal to consumers despite the rise of nationalism across the globe.

“It’s very rare that people have a negative view,” the CEO said. “The worst case scenario is that they don’t know what Sweden is.”

Electrolux is looking to repeat the successful revamp of its AEG-branded washers and kitchen appliances with its namesake label, starting with ovens and stoves to be launched in Europe this fall. Samuelson hopes that sales of new, more lucrative products will help margins and offset raw-material price gains, adverse currency movements and trade tariffs, which have forced the company to hike prices, deterring some consumers from buying new appliances.

In a departure from the M&A strategy of his predecessor, which included a failed attempt to take over General Electric Co.’s rival business, Samuelson said more attractive opportunities lie in investing in research and development, marketing and the ongoing upgrade of plants in the U.S. where it competes with Whirlpool Corp. That should lead to another jump in R&D spend, from 3.2% of sales in 2018 versus about 2% a decade ago.

“Will we increase another 50% in the coming decade? Maybe not, but it will continue to increase,” said Samuelson, who took the helm in early 2016. “We’re in the middle of a huge transformation.”

Shares of the maker of Frigidaire appliances have added 15% this year, valuing the business at 67 billion kronor ($6.8 billion). They traded 0.2% lower as of 11:10 a.m. in Stockholm.

To contact the reporter on this story: Niclas Rolander in Stockholm at nrolander@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Andrew Noël, Rob Dawson

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