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BrandSource Drops Mobile Division

2/10/2009 01:24:00 PM Eastern

Aanheim, Calif. — BrandSource/AVB has “suspended” its car electronics division which was launched last March, due to economic conditions, it said.

The group has stopped its warehouse operations for car stereo products that included brands such as Alpine, Eclipse, JL Audio and JBL. Rick Mathies, who was executive director of the Mobile Electronics Source (MES) division has been let go, confirmed Jim Ristow executive VP of Brand Source’s Home Entertainment Source division.

“It’s not a surprise that under these trying economic conditions, a start up venture is more difficult to launch,” said Ristow noting that the 75 or so retailers who joined MES may still receive member benefits such as group insurance rates and financing.

“Everyone’s watching inventory levels, credit, ROI and no matter how strong the business model, immediate positive results are typically not the norm in a startup. Therefore, we’re just suspending our warehouse strategy until the economy stabilizes and we can do a normal launch,” Ristow said.

The MES launched last spring as collaboration between Brand- Source/AVB and the Mobile Enhancement Retailers Assn (MERA) with the intention of providing smaller 12-volt retailers an advantage to compete with big box retailers and to help them transform their image from hobby shops to more professional retailers.

The group promised retailers benefits such as free shipping on warehouse orders of $1,000 or more for mixed brands.

Another buying group for select car stereo retailers called In-Car Experts (ICE) said its members, with 240 store fronts, are not experiencing the sharp declines seen in the general auto sound market as the average ICE members has been in business over 23 years. Executive director Rob Elliot said, ICE retailers are finding that they are benefitting from the demise of other car stereo retailers who have left the marketplace, including Tweeter and Circuit City.