4 problems that pushed Oreck into bankruptcy
The vacuum cleaner company was struggling to compete against rivals with better marketing tactics and technology.
The Nashville, Tenn., company said it would continue operating as usual, but will use the bankruptcy protection to get its finances in order while it looks around for a buyer, according to The Tennessean.
Oreck has about 325 employees at its 96 retail stores, the newspaper reported. It also has 250 workers at its factory and about 70 employees at its corporate office.
How did things turn out so badly at Oreck? Based on this writeup in The Tennessean, here are four problems that hurt the company:
The direct sales model wasn't working. Where do you go to buy a vacuum? Wal-Mart (WMT) or Target (TGT), perhaps? Maybe Amazon.com (AMZN)? Not enough people thought about going to an Oreck store or calling the company directly.
The company didn't jump on bagless technology. Shoppers have been hot for bagless vacuums for years, especially after Britiain's James Dyson unveiled his popular line in the U.S. in 2002. It took more than a decade for Oreck to embrace bagless technology.
It clung to infomercials for too long. Oreck needed to modernize its advertising and marketing strategies, but it inexplicably stuck with late-night infomercials for a long time.
It looked like your grandma's vacuum. Oreck's designs were boxy and out of date. Only recently has the company unveiled sleeker, more modern models.
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One of the few if not the only American manufacturer of vacuum cleaners. The owner paid his employees while rebuilding after a hurricane and other good things. Oreck has seemed to be overpriced compared to the cheap Chinese manufactured products.
I hope they can come out of Chapter 11 or America will lose one more battle against the cheap Chinese products again.
Honestly, even Dyson is selling at Walmart and Target. Why did Oreck not do that? I hope they can pull out of it because Oreck is a good quality vacuum.
Someone please tell me why to go bag less? At some point when you’re done you need to empty all the dust and dirt into some kind of bag or trash can, and at that point you will have to breathe that dust and crap in..... It's a shame the company can’t manage their finances, I have owned their product in the past and it worked quite well! Never understood bag less vacuums.
I have a Oreck that is over 7 years old and I wouldnt trade it for anything that is on the market today.
Its lightweight but powerful and easy to handle. I have tried the bagless vacuum cleaners and they really defeat the purpose when you go to empty the canister and the dust and dirt flies all through the air.
Sure hope Oreck can turn things around and try some different marketing approaches. Consumers would rather buy a cheap piece of crap at Wal-mart that they have to replace every 3 or 4 years than to pay a little more for something that will last a much longer time and have stores that will service them when they need repair or routine maintnance. My grandmother had a old Kirby vacuum cleaner and you couldnt break it if you tried. Its a different world now and everything is disposable.
Bagless vacs are a horroble mess when it comes time to empty them. The Dyson is also not especially impressive. Just goes to show you that the Amirican consumer is shallow and fickle. Flashy marketing and low price are the way to win most Americans, for a minute.
...OK...here is a counterpoint for `bagless’ vacuums. I had a very nice and very reliable and durable vacuum of the Montgomery Ward brand...can readers see where this going?...The vacuum still remains great, still with a metal body, but there are no `bags’ available on the commercial market to fit it.
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