Pinnacle Speakers Undertakes New Strategies - Twice

Pinnacle Speakers Undertakes New Strategies

Licensing program, e-commerce division spinoff in works
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Boca Raton, Fla. — Pinnacle Speakers, a family-owned speaker company founded in 1976, is seeking a buyer for the e-commerce portion of its business and plans to licenses its brand for use on audio categories that the company currently doesn’t offer.

Pinnacle currently sells in-room floorstanding and bookshelf speakers, custom-installed in-wall and in-ceiling speakers, powered and passive soundbars, powered subs, and 2.1- and 5.1-speaker packages.

The company’s e-commerce business sells Pinnacle-brand products through such e-tailers as Dell.com, Woot.com, Groupon.com, QVC.com, Amazon and others that deliver millions of dollars in sales, said Mickey Rothenberg, Pinnacle’s VP and director of strategic marketing. He and two brothers co-own the company. Pinnacle’s e-tailers sell SKUs that differ from the SKUs that Pinnacle sells through authorized distributors to its custom-installer accounts, some of which operate retail stores.

Buyers of the e-commerce business would get proprietary legal contracts and marketing methods developed by the company to maintain brand integrity, combat price erosion and prevent conflicts with brick-and-mortar dealers, Rothenberg said. The purchaser also gets the company’s current e-commerce accounts and right to use current and future e-commerce-dedicated Pinnacle SKUs. Pinnacle can continue to do R&D on future e-commerce products if the buyer lacks the capability.

Rothenberg also said he is available to continue running the company for a period of time. “We have all the relationships and knowledge, so if they want, I can come on board for a period of time.”

The e-commerce division “is something I set up and developed from the ground up after we won a seven-figure legal award against a major company [distributor] that was violating our no-internet policies,” Rothenberg said. “From that experience, I developed our own special proprietary approach to the e-comm market to turn it into a profit-maker and maintain brand stature.” High-end brands, he said, “are scared to death of e-comm channels and view it as a dungeon of price and brand erosion. It does not have to be that way.”

With the sale of the division, he said, “comes prime accounts doing millions of dollars sales and our proprietary unique methods of proven e-commerce success preserving brand integrity and good gross profits for this price-driven channel,” he added.

Separately, Pinnacle plans to license its brand for use on products that it currently doesn’t offer, such as wireless speakers, Bluetooth speakers, headphones, desktop and portable speakers, A/V receivers, wires, cables and A/V accessories, Rothenberg said.

Pinnacle is also willing to discuss selling a majority stake in the company, he added.

Pinnacle believes it is the oldest privately held speaker company in the U.S. It does its own design and quality control but typically contracts out to other manufacturers to build most of what it sells.

The company’s HQ is in Boca Raton, but engineering is based in Massachusetts.

Rothenberg can be reached at mickeyrothenberg@aol.com.

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