Aga Foodservices, the cooker maker famed for its Home Counties appeal, is seeking to capture the imagination of the North American homeowner as it centres its expansion strategy overseas.
The group, which sold its pipes business and changed its name from Glynwed last year to reposition itself in the domestic and commercial kitchen equipment market, said it had around £100m to spend on acquisitions and would be looking in the US and on the Continent. It will open new stores in Boston and Paris later this year.
William McGrath, the chief executive, said Aga had "to appeal to the imagination of Americans" if it were to achieve its goal of expanding current US sales from just 400 cookers to more than 1,000 over the next two years. Aga said its $29m (£20m) acquisition of Domain Home Fashion, the east coast US retailer, earlier this week would give it retail expertise and help it expand its toehold in the American market. "If it's going to work anywhere it's going to work in New England," Mr McGrath said.
The group is cutting 250 jobs at its plant at Leamington Spa following the sale of its non-range cooker and standalone fires businesses last week. The disposal reflects Aga's plans to drive sales of its range cookers, which are modelled on the original 1920s design, in the UK by 25 per cent to 10,000 by 2003. It has stepped up its marketing with a £1m advertising campaign that features Iron Age man using an Aga to emphasise the cookers' dual traditional and contemporary appeal.
As part of its shift towards growing its domestic offerings following last year's purchase of Fired Earth, the interior finishes company, Aga is launching fridges to match its cookers. They will retail for £2,700, come in the full range of Aga colours stamped with the trademark badge, "and have absolutely no plastic inside", said Mr McGrath.
Strong full-year results out yesterday from the group pushed its shares 4 per cent higher to 269p. Aga topped market expectations, increasing underlying profits at its core businesses from £20.6m to £22.6m. Pre-tax profits for the year to end December fell from £30.8m to £24.7m on sales up from £204.6m to £231.8m.
Analysts said the group had logical plans for expanding the business. "America is such a big market, it's good to see them going for it," said Michael Blogg at ING Barings. "But it's difficult to tell how lasting the fashion would be. We're talking about getting into the American consciousness."
In its foodservice arm, Aga benefited from strong sales of bakery equipment as supermarkets such as J Sainsbury and Safeway revamped their in-store facilities. But profits at the commercial catering equipment unit, which accounts for about half of the firm's business, were flat, reflecting the slump in tourism that affected its hotels and catering customers.
Although Mr McGrath admitted that the group was not immune from the risk of weakening consumer spending and falls in capital expenditure from its commercial clients, he expects Aga to make good progress after a strong start to the year.