George Foreman Still Strong But His Grill Maker on the Ropes
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
If only the company that makes George Foreman grills had been able to come up with, say, an Anna Kournikova juicer.
Having been unable to follow up on the success of the grill bearing Mr. Foreman’s name, kitchen appliance maker Salton Incorporated is in severe financial trouble.
The Chicago company is carrying $482 million in debt, $275 million of which is revolving credit, according to DebtWire, a New York-based intelligence firm specializing in distressed debt.
Salton also faces a $125 million bond coming due in December, and a $150 million note coming due in 2008, both with double-digit interest rates, according to DebtWire.
At the same time, Salton reported it had $37.4 million in cash as of January 1, barely enough to cover its annual interest expenses.
To help revive its business, Salton in August introduced the George Foreman “Next Grilleration” grill with removable plates for easier cleaning.
The original George Foreman grill – introduced in 1995 – put Salton on the map with sales growing to 10 million units in 2001 and 2002, according to the company. By mid-2003, 50 million George Foreman grills had sold.
However, the American market for George Foreman grills – the company’s leading product – is apparently waning. Salton – which also sells the Juiceman and FarberWare, among other brands – last week reported $377 million in sales for its second fiscal quarter ended January 1, a $20 million drop from the same quarter last year.
The decrease was the result of a $49 million drop in domestic sales, which offset a $28.9 million increase in international sales, Salton reported.
The company was relying on strong holiday sales that never materialized. Salton blamed product shortages.
Salton’s chief executive, Leonhard Dreimann, said in a statement that the company has invested heavily overseas to capitalize on its growth there, and has cut expenses domestically. “We also are evaluating options related to our capital structure, as we are actively considering our alternatives to restructure our debt,” he said.
