Parent Company of Sunfire, Panamax, Speakercraft To File For Chapter 11 Bankruptcy

[chrisy]

Parent Company of Sunfire, Panamax, Speakercraft To File For Chapter 11 Bankruptcy

Nortek, the parent company of brands such as Sunfire, Panamax, Speakercraft, Xantech, Furman, Litetouch, Omnimount, Niles, Elan and other AV marks, announced yesterday at the CEDIA tradeshow in Atlanta that they would be filing for Chapter 11 Bankruptcy protection. The news came via a press release.

Nortek along with the likes of Planar, D&M Holdings and some private equity companies had been snapping up AV companies back before banks started getting stingy. Flush with funny money, buying companies from their founders was easy back in the day. Running them as and serving both the dealer base as well as the customer base has proven to be a whole other issue for AV industry consolidators, especially in these tough economic times.

Nortek is selling the concept that they are flush with cash despite the bankruptcy and that things will remain the same as before. Clearly, that wasn't good enough to become profitable in these difficult times. To survive Nortek will need to invest in new products, new concepts, become a better marketing company that doesn't rely on the lift from PR exclusively for product momentum if they have hopes of coming out of their problems looking and smelling good. What's more likely is Nortek looking to spin off some of the brands they gobbled up to raise even more cash so that they become more of a lean operation. Don't be shocked when more than one of the brands potentially goes on the block at deeply discounted prices. Jeremy Burkardt could buy back Speakercraft or Bob Carver could buy back Sunfire without me falling out of my Aeron chair out of shock.

Stay tuned.

Source: HomeTheaterReview.com

[StereoClarity]

Wow, it's a shame. The economy really has hurt our industry so much.

[graphicguy]

Interesting.....and sad. In addition to the economic malaise, there's been a fundamental shift from the local AV shop, where an enthusiast could sit, watch, listen, chat with knowledgeable representatives, to getting that same information to on-line sources.

Both have their advantages. Both have their pitfalls.

Manufacturers have been trying for years to limit the availability of their products to brick and mortar stores, in defined geographic locales.

Those who know a bit about the technical aspects of AV products, can now surf the WEB, looking only for the best price. However, those that need help, can come to forums such as these and get that advice. What they can't do, is to do a shop, listen, compare, by shopping online.

I do question how long certain brands will be able to hold out by marketing only to brick and mortar stores? For good or for ill, many will forgo getting solid information from these stores, to get the price they want (most times with no warranty) from internet dealers. Then, they'll rely on skimming the internet to get their installation, technology, and warranty issues handled.

I don't see this getting any better from these boutique brands. , even the big box stores are getting into the "deep discount" act, with little offered in the way of support. My much loved 60" KURO plasma display was bought from Costco. Load it up. Take it home. For a price that was roughly 40% less than my local (and now defunct) AV store, I did my research on line. Decided what I wanted. Delivery, unpacking, setting it up, was up to me.

Right or wrong, I traded services for price. Seems that's the way it's going.

Only way around this dilemma is for the boutique brands to offer their wares on-line, at their own WEB stores.

[lcaillo]

graphicguy wrote:

Manufacturers have been trying for years to limit the availability of their products to brick and mortar stores, in defined geographic locales.

Actually, what they have been largely doing is trying to keep the specialists who sell most of their products happy by limiting internet sales. The get lots of flak when they go direct, so they often play games with models and warranties to try to differentiate and give the dealers an advantage.

[tonyvdb]

Makes you wonder if stores like Best Buy were to sell Sunfire or B&W if sales on those products would actually improve, it seems like the little high end stores price themselves out of the market because of the high overhead.

[graphicguy]

lcaillo wrote:

Actually, what they have been largely doing is trying to keep the specialists who sell most of their products happy by limiting internet sales. The get lots of flak when they go direct, so they often play games with models and warranties to try to differentiate and give the dealers an advantage.

No doubt. What I've noticed....oh probably in the last two years, that the dealers have been shutting their doors. I know just in my neck of the woods, 3 have shut down in the last year.

I get to travel a lot. In most if the cities, I'm noticing the same thing, as I always make it a point to seek out AV shops to feed my AV obsession.

With fewer outlets, it's not surprising to me that some of the manufacturers are losing volume (or filing for bankruptcy).

There's a wealth of information one can glean by coming here, or even some of the other AV forum sites. That supports quite a few internet direct only companies like EMOTIVA, OPPO, SVS, EPIK, and others.

In short, you don't have to walk through the doors of a store to find good AV gear.

[tonyvdb]

graphicguy wrote:

In short, you don't have to walk through the doors of a store to find good AV gear.

That is really true, I have a good friend that works in one of our local High end shops and he simply could not come close to the price I payed for my Onkyo 805 his face dropped when he found out the price I payed going internet direct. It was not even close to the price he could get it for me.
And I really wanted to help him out by buying it through him.

[graphicguy]

tonyvdb wrote:

That is really true, I have a good friend that works in one of our local High end shops and he simply could not come close to the price I payed for my Onkyo 805 his face dropped when he found out the price I payed going internet direct. It was not even close to the price he could get it for me.
And I really wanted to help him out by buying it through him.

Yep....much cheaper to ship it out of a warehouse than it is set up a store, pay sales folks, turn on the lights, make the showroom look nice, etc. Plus, the internet AV community is way bigger than any local customer base.

But, you sacrifice actually touching, feeling, hearing any gear. And, you have to rely on forum members (like the ones here) to give their impressions. One bad apple in an internet forum, that doesn't like the equipment or the company in question can be difficult to "weed out the chafe from the wheat".

Still, even established brands have a tough time competing against the performance and value you can get from internet direct companies.

[tonyvdb]

but $400 difference? How can someone stay in buisness with that kind of price difference?

[graphicguy]

tonyvdb wrote:

but $400 difference? How can someone stay in buisness with that kind of price difference?

Two schools of thought........

1) Onkyo makes a bunch.....and I mean a whole bunch of those AVRs. They use the same platform for at least 3 different models. I'd say that out of the big brands (Onkyo, Pioneer, Yamaha, Denon, maybe Harmon Kardon), Onkyo outsells all of them. They're available seemingly everywhere. So, there's that whole economy of scale thing going on.

2) I'm waiting on the day you can buy an Onkyo AVR at your local convenience store (that's a bit of an attempt at humor). But, they are marketed by just about everyone, so it seems. They've got their own refurb store (www.shoponkyo.com). And, they sell their refurbs through another source, too (www.ac4l.com). Clearly, there's margin to be made, if they can still make that kind of money on refurbs.

You put massive manufactured quantities, together with widespread availability, you're going to see some hefty discounts.