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New ADCOM Owners Outline Plans

3/18/2002 02:00:00 AM Eastern

ADCOMs new owners went to the Home Theater Specialists of America (HTSA) conference here to outline their plans to accelerate product development, add more multichannel products and improve quality control.

The new owners, through their Scottsdale, Ariz.-based holding company Klein Technology Group, say they will maintain the audio brand's high-performance, high-value position and continue its commitment to two-channel products.

The group's three principals — president Doug Klein, engineering/manufacturing VP Dan Donnelly, and product/business development VP Matt Lyons — are industry veterans, as is new ADCOM sales VP Steve Brunner.

Klein Technology purchased the ADCOM brand and assets from the current owners, who changed the name of its Marlboro, N.J.-based company to KEF America to continue marketing the U.K.-based KEF and Celestion speaker brands in North America. The shareholders "wanted to sell certain assets to meet certain stockholder needs," said KEF America president Alec Chanin, whose family is majority owner of KEF America. The deal closed February 26.

"The ADCOM brand is very strong with the end user," said Lyons, whose OEM engineering company previously developed select products for ADCOM and other suppliers. The brand also enjoys "a loyal dealer base, particularly in the East and internationally," said Klein. Nonetheless, dealers are eager for the brand to "turbocharge the multichannel, home theater side" of its business, Klein said.

A broader, deeper line will accelerate turns and thus improve profitability for dealers, Klein added. Current price points are good, and margins have been "consistent," he noted.

Improved reliability will also improve dealer profitability, he said. To that end, ADCOM is switching factories to a Taiwan facility that previously built California Audio Lab (CAL) products. The factory will build only for ADCOM, Klein said.

ADCOM will focus exclusively on independent specialists, whereas the brand in the past "flirted in and out" with such chains as The Good Guys and Ultimate Electronics, Klein added.

ADCOM isn't changing rep companies, and it's honoring dealer agreements, but the brand has an opportunity to find new dealers in the West following the brand's departure from Ultimate, Klein noted. "In the East, too, there's an opportunity to grow the dealer base."

The brand's initial product priority is to "refresh the core home theater product group," said Lyons. At September's CEDIA Expo, "our product roadmap will be clearer." The company will show mockups or actual new products there, he said.

Although the principals' past experience includes the marketing of Loewe and Sensory Science video products and California Audio Labs A/V products, Klein declined to say whether video is in ADCOM's future. He also declined to say whether speakers are in store, given Lyons' previous seven-year stint in engineering at Polk.