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Klipsch Expands Into CE Biz With Mondial Deal

1/29/2001 02:00:00 AM Eastern

LAS VEGAS - Speaker supplier Klipsch has entered the audio electronics business with the purchase of select assets of Mondial Designs, which marketed components under the Acurus and Aragon brands.

The 55-year-old speaker maker also hired Mondial's top two engineers and Paul Rosenberg, who co-founded Mondial 18 years ago.

Describing the two brands as having been undercapitalized, Klipsch executive VP T. Paul Jacobs said Klipsch resources will make it possible for the brands to generate higher revenues by "offering a well-rounded product line" and by opening new territories where the brands lack distribution. "Mondial has reps in only half the country," he said.

Although the company was at CES soliciting dealer and rep feedback on the brands' long-term strategy, Klipsch already has some short-term ideas, including more aggressive penetration by one of the brands into the custom installation segment. Likely products would include 12-channel amps and, if dealers believe it's worthwhile, a distributed-A/V system, Jacobs said.

Meanwhile, Mondial's engineering talent will enable Klipsch to add digital electronics and digital amplification to Klipsch-brand speakers, as well as develop home theater electronic speaker solutions ranging in price from less than $2,000 up to $30,000 or $40,000, Jacobs said.

Klipsch is considering co-branded Klipsch/Acurus and Klipsch/Aragon solutions, and if that happens, the company will offer the solutions to current Klipsch and Mondial dealers. "People are looking for home theater solutions," he said. Klipsch's goal is to ship the first solution by September.

Likewise, co-branded high-quality tabletop systems featuring Klipsch-branded speakers are also under consideration, Jacobs said.

The first speakers equipped with digital electronics will be multimedia speakers incorporating digital equalization and amplification and room-response correction. They're due in late spring or early summer.

Music studio speakers with digital amplification and equalization will ship in late summer, but home versions won't be out until 2002 "at best," he said.

As for distribution, Klipsch will retain Mondial's independent reps and 250 dealers and will offer separate franchise agreements for the Acurus and Aragon brands, Klipsch's top-end Heritage series, and Klipsch's core products. Klipsch uses factory sales reps to sell its speakers.

Based on dealer feedback at CES, Klipsch hopes by March or April to develop a three-year plan for the Mondial brands, which market amps, preamps and processors. At CES, Aragon added a DVD-A/V player.

Jacobs described Acurus as a midfi/upper midfi supplier positioned like Adcom, Rotel and B&K. Aragon is positioned higher and competes more with companies such as Proceed. Klipsch's selection, he said, includes a variety of speaker series that match the electronics brands' positioning.

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