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Kenwood Trims Home Effort Again

Long Beach, Calif. – A few months after outsourcing most of its home audio marketing functions, Kenwood USA will eliminate five key home audio sales positions on April 1 because “home audio sales are not what they should be,” executive VP Dan Petersen said.

Petersen will assume most of the responsibilities of the terminated sales positions.

Meantime, Kenwood Corp. of Japan is forming a Consumer Business Development Center whose primary task is to identify new technologies and new growth areas for Kenwood’s home audio business. The center will give Kenwood a chance to “fine tune” its home audio focus, Petersen said.

Because it is “stepping back” to identify new opportunities, Kenwood has put “on hold” its plans to re-launch the high-end Sovereign component series and to sell the industry’s first 400-disc universal DVD-Audio/SACD changer, which was to appear in its mainstream Kenwood component series later this year.

Although the company’s home audio sales have been lagging, Kenwood’s car audio sales are exceeding first-quarter estimates, Petersen said. Kenwood also said its fortunes have rebounded from just a few years ago, when it had a negative net worth, suffered a cumulative loss of $428.9 million, and was $1.05 billion in debt. Today, the company said it enjoys positive net worth and net income, has cancelled its cumulative loss, and has reduced its total debt to a third of its level of two years ago.

The sales positions to be eliminated are sales VP; the head of sales for the Rocky Mountain area, which is the home division’s only direct-sales territory; both regional sales manager positions; and one of two sales trainers. The national accounts VP position has been retained. “Our home business has been primarily with major chains and distributors,” Petersen noted.

The changes follow the elimination of four key home marketing positions several months ago. Their functions were outsourced primarily to DelphysWest/DDK, an advertising and public relations company. Other functions were outsourced to other contractors.

Despite the latest changes, Kenwood will maintain its existing complement of independent reps, who handle home and car audio, and its distributor base, including D&H, Ingram Micro, DBL; and the independent reps that also stock products. The company will likely appoint an independent rep to handle the Rocky Mountain territory, Petersen noted.

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