What happen to Sunbeam Corp. in 1996?

Question

I want to know about the scandal that involved with Al Dunlap: why it happened and how.

Answer 1

Al "Chainsaw" or "Rambo in Pinstripes" Dunlap would fire people everytime they lost money and ended as a saying goes "Cut so much fat that it ended cutting into muscle."  Sunbeam outsource many of their manufacturing to foreign coutries.  Al Dunlap in no longer there since he did not produce his promise to save them.

Al Dunlap is a West Point graduate who apprenticed under Sir James Goldsmith and Kerry Packer before taking the reins of Lily Tulip Cup and Scott Paper. http://en.wikipedia.org/wiki/Albert_J._D...

Paul Soglin: Waxing America: CUNA Mutual: Not Al Dunlap's ...

Jan 29, 2008 ... Though we would like to, few us will forget 'Chainsaw Al' Dunlap. Dunlap was the one who drove Sunbeam into the ground. ...

http://www.waxingamerica.com/2008/01/cun...

Answer 2

Al, aka Chainsaw Al and Rambo in pinstripes was one dimensional in his approach to management, cut costs by cutting jobs.

However, the scandal involved Sunbeam's barbecue division. I believe the year was 1997 rather than 1996. In 1997 Sunbeam's reported revenues increased by 22%; in the fourth quarter, they were up by more than 30%. The company had loaded its barbecue inventory onto its customers shelves through favorable credit terms rather than the usual terms. In other words, the  improvement was temporary. By loading its wholesale customers' shelves in the fourth quarter, Sunbeam was able to book an impressive jump in sales; once those inventories swelled, however, demand for more barbecues collapsed, leaving Sunbeam with the double curse of falling sales and shrinking margins.

There is nothing illegal in these so-called ''bill and hold'' deals with retailers in which Sunbeam products were purchased at large discounts and then held at third-party warehouses for delivery later. However, it is a deceptive practice that tended to show momentum that really wasn' t there.

Hope that helps.