Whirlpool (NYSE: WHR) has decided not to try to outbid Middleby Corp. (NASDAQ: MIDD) for Britain's AGA Rangemaster (no U.S. listing). Whirlpool shareholders should be relieved and Middleby shareholders somewhat concerned.
AGA Rangemaster produces conventional appliances under the "Rangemaster" brand, but is best-known for its "AGA" line of combined kitchen stoves, water heaters and central heating boilers. These are essentially fashion items rather than appliances. So it can be assumed that they will eventually go out of fashion.
They appeal to those who want Kuntry Kutesy in the kitchen, and/or are able to convince themselves that an appliance that must be left on most of the time is energy efficient. They are not practical tools for real cooks (it is hard to do much fine baking, for instance, in an oven without temperature controls). Their application in central heating is restricted to radiator systems. They are adequate for provision of hot water where water pressures are low and demand limited (i.e., where people do not bathe often). Since provision of hot water requires that the stove and oven be turned on, they are not suitable for climates warmer than England's.
As baby-boomers have purchased country homes in England, the AGA has become a stereotyped kitchen essential. To go with it, AGA Rangemaster has a breath-takingly over-priced line of tiles sold through its "Fired Earth" retail operation, and a similarly expensive line of cooking pots, "La Cornue."
Granted, similar sarcasm could be directed at Middleby's "Viking" line of professional-style stove tops, ovens and ranges. However, the "Viking" product is at least fit for purpose -- it actually is an exceptional cooking instrument. Further, owning one does not commit its owners to changes in their lifestyle. Ten years from now, when they are not longer the rage among housewives, owners will still be pleased to have one. I have cooked on an AGA as well as a Viking, and I would take the Viking any day, fashionable or not.
I believe that Middleby has acquired what will become a white elephant.