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Viking continues to struggle since purchase by Middleby

By JACK WEATHERLY 

Things were going to be better for the Viking Range Corp., founder and Chief Executive Fred Carl announced in a long email to employees on Dec. 31, 2012.

He referred to “the past four rough years” for the company. By the end of 2012, employment had been nearly halved from a pre-recession peak of 1,200 due to the housing collapse, which cut deeply into Viking’s residential sales.

And he told them of the overtures by number of large companies that had been turned down.

But, finally, and after long consideration and examination, he and partner Stephens Inc. of Little Rock had found the right company.

Middleby Corp. of Elgin, Ill., had bought Viking, he said. The new owner touted the Viking stove as “the world’s first professional range for the home.”

“I know that all of you are  going to find this new chapter in Viking’s life very exciting and fulfilling,” Carl wrote.

Carl was to remain as as president and chief executive. “I’m not going anywhere and I will continue just as I have in the past,”  he said in the email.

Instead, one month after the $380 million acquisition, Middleby laid off 20 percent of its Greenwood work force, which had been 700 at the time of the purchase, leaving 560 employees, according to Crain’s Chicago Business.

And Carl — who designed the stove and made it the centerpiece of the company he built over 25 years,  transforming downtown Greenwood as he added products — resigned.

Two years later, its work force still stood at about 560, according to a company response to a large-employer survey request by the Mississippi Business Journal.

But by mid-June, the number had dropped to 421. A call to Middleby on Tuesday about unconfirmed reports of another 40 layoffs was not immediately returned.

Asked if he felt that Middleby had not lived up to its word, Carl declined to comment.

While shares in Middleby, a diversified food-service equipment company,  have risen 8,300 percent in the past 15 years, there have been problems incorporating the Viking division.

Viking has experienced “unforeseen product quality issues and unexpected costs of recalls,” according to StreetAuthority on June 15.

Reuters reported on May 21 that Viking recalled 60,000 gas ranges “after dozens of reports of them igniting by themselves,” according to the U.S. Consumer Product Safety Commission.

StreetAuthority also reported that Viking revenues have been dampened by discontinued product lines and the closing of underperforming dealerships.

However, the StreetAuthority analysis holds that commercial sales should bolster Viking’s performance.

Also, “along with several other top brands, Viking is helping Middleby conquer the vast residential kitchen market” which Middleby had little presence in a few years ago, but is now at $273 million annually, and growing.

The housing market bodes well for that. Permits issued in May were up 11.8 percent in May,  compared with a year earlier, according to the Commerce Department and construction starts had increased 6 percent year to date as of the time of the government report.

Middleby shares closed at $118.80 on the Nasdaq stock market on Tuesday, up 25 cents and close to the 52-week high of $120.

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