Circuit City Goes hi-fi with D&M Holdings

[Wayde]

D&M Holdings is the hi-fi collective that owns names like Denon, Marantz and Boston Acoustics. Their products by Denon and Boston Acoustics have been picked up by Circuit City. D&M Holdings is originally a Japanese corporation that formed with the merger of Denon and Marantz and has since picked up several audio / video technology firms. Most notably it owns Boston Acoustics, Replay TV (the hi-fi answer to TiVo) and Rio, makers of fine digital media players.

For every winner there must be a loser. D&M Holdings is making a major push into the retail mainstream with the release of Denon and Boston Acoustics to Circuit City. The shift to D&M Holding's products by Circuit City will displace products already on shelves by Harmon Kardon and Infinity. By September's end Circuit City will have dedicated home entertainment areas of their big boxes in about 500 stores.

As expected Circuit City says it's the result of their commitment to improved home entertainment offerings…excited to add Denon and Boston Acoustics … blah … blah … blah.

A notable quote from all this was that Paul Bente the President of Harman Consumer Group's speaker division says: Harman's parting with Circuit City was very much mutual… Our take on the situation is that the year long plus R&D sabbatical Harman Kardon took while the industry exploded into HDMI and iPod functionality may have taken a toll on the manufacturer - driving down sales and causing Circuit City to look elsewhere for market leadership.

That's interesting. Once upon a time a company like HK taking an R&D Sabbatical wasn't a bad thing. On the contrary, hi-fi manufacturers who made high-end gear will (and still do) take lots of time off from developing new products. New products lines every year is a sign of a market driven mass production. But that's the game Circuit City is playing. Swim their pools - you gotta' play by their rules.

Denon will be releasing a dedicated line of products to Circuit City stores. So, those of you looking at Denon products at hi-fi shops won't see the same gear at Circuit City. Yamaha apparently does this already with an HTR-line of receivers. In other words, get ready for budget Denon gear. Does this mean the once prestigious Denon line has sold out?

Clint from Audioholics asks: Is this a sign that Harmon Kardon is on their way to becoming the next Sansui?

Link To Original Article

[Sonnie]

This is very interesting and somewhat surprising... not so much with Boston Acoustics but with Denon. I don't imagine Denon will be creating new products but rather rebadging current products like Yamaha.... or is that what you suggested?

[Wayde]

I'm guessing they'll just put different names on existing products. But a foothold into Circuit City could allow them to plumb the depth of HTiB and other undesireable mainstream fare.

[reed.hannebaum]

If Circuit City eventually becomes the dominate marketing channel for Dennon, how long will it be before they leverage their position by dictating features, and quality/price? Will Denon at that point be able to cash flow the development of high end and low end lines of equipment, especially if their margins are being squeezed? I would think that Yamaha is so big that they would be relatively immune to this kind of pressure and would have to money to do what ever they want; but will Denon?