After having searched high and low since August, kitchens and appliance manufacturer Breville Group Ltd (ASX: BRG) finally announced the appointment of Mr Jim Clayton as its new Chief Executive Officer yesterday.
Clayton joins the company following a lacklustre first-half period which saw earnings and revenues fall 4.9% and 5.9% respectively, largely due to poor returns from its North American business and low consumer confidence locally. However, his appointment could actually catapult the company into a new phase of exciting growth, centred around the connectedness of its products to the internet.
This new phenomenon is known as the "internet of things", or IoT. Under the IoT, everyday objects and devices such as fridges, toasters and cars will become capable of connecting to the internet. In 2014, estimates supplied by Forbes suggested that 40.9 billion devices could be connected to the internet by 2020, with the worldwide market for IoT solutions to balloon out to $7.1 trillion in 2020, up from $1.9 trillion in 2013.
Breville recently confirmed that expansion into this area would be its new phase of growth. As quoted in the Australian Financial Review, Breville's chairman Steven Fisher said: "Everything we touch will have connectivity with the internet… That's the next phase of where things are going."
The appointment of Clayton as CEO seems like an appropriate move considering his history with technology companies. He has previously held roles with LG Electronics Inc (where he led technology innovation and new growth markets for LG's Home Entertainment Company), as well as Symphony Technology Group in Silicon Valley. He will relocate from Seoul to Sydney with his family to commence his new role as at 1 July 2015.
Should you buy?
Breville's shares have fallen heavily since the departure of its previous CEO, Jack Lord. Since mid-August, the shares have fallen more than 13%, while they're trading 18% lower over the last 18 months. Although the company is facing increasing competition, its push into the IoT could generate plenty of excitement over the coming years. At its current price of $7.60, it's certainly worth a closer look.
