By Joseph Palenchar On Oct 8 2012 - 4:07pm
Binghamton, N.Y. – McIntosh Laboratory is a better fit with the luxury audio brands marketed by new owner Fine Sounds than it was under former parent D+M Group, whose other audio brands share little with McIntosh in customer demographics, dealer base, and distribution, McIntosh president Charlie Randall told TWICE.
“They’re not in the specialty niche than McIntosh plays in,” said Randall, who remains McIntosh president under the new owner. “They divested us because we couldn’t share resources.” D+M, he said, has “a different focus and direction.”
For example, D+M’s plans “are to expand distribution,” he said, pointing to D+M’s expansion into the headphone market, whereas McIntosh is focused on A/V specialists and installers.
McIntosh sales and marketing remained separate from that of the Denon, Marantz and Boston Acoustics brands, as did supply-chain management, because McIntosh targeted a separate audio niche, Randall continued. “Our parts are so different” that McIntosh couldn’t gain economies of scale though consolidated supply-chain management, he said. However, McIntosh will continue to source transports through D+M and will source other components through D+M if needed, Randall said.
Fine Sounds, in contrast, has been assembling a stable of luxury audio brands in the past few years, and McIntosh will now be “positioned with like brands that also complement one another.” The brand will be able to gain “same-market-segment synergies,” he added.
Potential exists for combined event marketing and training sessions and perhaps, farther down the road, enhanced marketing programs such as market development funds, Randall said. “More resources can be shared more efficiently” under Fine Sounds, he said.
Fine Sounds’ brands consist of speaker maker Sonus Faber, vacuum-tube component maker Audio Research, DAC maker Wadia, and phono-cartridge maker Sumiko, Randall said. McIntosh markets high-performance speakers, two-channel and home-theater electronics.
Although all Fine brands target the luxury audio market, their products are different enough so there is little overlap, Randall said. McIntosh speakers use line-array technology that makes them larger than Sonus Faber single-point-source speakers, and Sonus Faber specializes in speakers and has a far broader assortment, he said. Audio Research amps and preamps are priced higher than McIntosh models, and that brand has a wider assortment of vacuum-tube products than McIntosh. For its part, Wadia focuses on DACs, whereas McIntosh has one.
McIntosh’s dealer base of 195 U.S. dealers, however, features “quite a bit of overlap” with the other Fine Sounds brands, Randall said. McIntosh will be Fine’s largest brand in dollar volume, he noted.
As for its sales strategy, Randall said McIntosh will continue to sell through independent reps in some markets and in-house sales managers in others.
For its part, Fine Sound said, “As of right now there are no plans in motion to consolidate any parts of the business.” The company said it “is committed to preserving the culture and team that makes McIntosh unique and successful. Currently, all of the other brands in the portfolio operate autonomously, and we expect McIntosh to be no different in that regard.”
The McIntosh team, Fine said, “is the brand’s key asset. Fine Sounds will rely very much on this talented group of people and looks forward to supporting the Binghamton-based team. As well, with the anticipated expansion of the brand, there will be many opportunities for professional growth and advancement for McIntosh’s team.”
In North America, however, Fine Sounds has consolidated Wadia sales functions with those of Fine Sound’s North American sales and marketing company, which doesn’t use reps. Marketing remains separate. Likewise, Audio Research was purchased by Fine Sounds about two years ago, and Fine’s North American sales and marketing company has also begun to absorb Audio Research’s sales functions.
Fine Sounds is owned by Quadrivio, an investment management company based in Milan, Italy. Quadrivio formed Fine Sounds about four years ago with the purchase of Sonus Faber.
This is a good move for Mac to part ways with a company that's trying to conquer the headphone market. Not that there's anything wrong with that.