Renovate

The Midwest's home furnishing icon, Masco, tries recession-proofing itself

Wednesday, October 2, 2019 by Snacks
_"What do you mean cabinets don't matter, Meg?"_

"What do you mean cabinets don't matter, Meg?"

Cabinets don't get enough appreciation... Holding up Nana's china like a never-ending bench-press is hard. But that's Michigan-based Masco Corp's bread-and-butter — producing home furnishings under brands like Hansgrohe, Delta, and Behr. Now Masco's selling its window division for $725M. And that's critical to its grand recession-proofing plan.

Homes get built, repaired, and remodelled... Masco wants to focus on those last 2 and sell the first. Here's what's in and what's out of Masco's feng shui makeover:

  • What it's selling: The parts of homes that only happen during new-house construction, like windows, doors, and kitchen cabinets.
  • What it's focusing on: The parts of homes that get repaired and remodelled over the years on existing houses, like paint, lighting fixtures, paint, showers, sinks, and more paint.
THE TAKEAWAY

"But Masco's cyclical, and a recession could be coming"... Execs at Masco hate hearing that, but it's kind of true. Masco is 'cyclical': business is good when the economy is good, bad when it's bad. During the '05-'11 housing downturn, fewer homes were built so Masco's profits dropped. Masco's sprucing up its business model in order to recession-proof itself — and shut up Wall Street critics.

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