Boston Acoustics Shifts Management, Markets - Twice

Boston Acoustics Shifts Management, Markets

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A reshuffled leadership team at Boston Acoustics said it will expand the speaker company's home-systems presence and build its international sales while scaling back its multimedia-speaker activities.

Under the management changes, marketing VP Allan Evelyn becomes president, while current president and chief operating officer Moses Gabbay becomes CEO and chief operating officer and co-founder Andy Kotsatos, who was chairman/ CEO, continues as chairman.

Kotsatos founded the company in 1979 with Frank Reed, who died in late 1996.

"I have been thinking about succession for awhile and want to see the company continue and thrive," Kotsatos said. Gabbay, who joined the company in 1981, was the "architect" behind the company's financial turnaround, which resulted from elimination of excess inventory, a reduction in operating expenses, and increased gross profit margins. (see financial story, p. 57).

Evelyn's 25-year audio-industry experience, Kotsatos continued, will be vital as the company "reengineers itself for future initiatives in the audio systems market with the goal of becoming a global audio company."

Evelyn joined Boston last November from Bose, where he served for 16 years, most recently as GM of wholesaling operations in the Americas. He was also VP/GM of JBL's consumer division.

Boston management is undertaking "a significant effort in developing new products and areas that is unprecedented in the company's history," Evelyn said. A marketing and product plan in development before the management shifts will "meet a changed market."

Acknowledging a "shift from components to systems in the audio-video specialty space," Evelyn said Boston has been known primarily as a speaker company, but he added, "We may be known for more things.

New products will be unveiled later this year, followed by "significant new products in calendar 2003," Evelyn said. There's a "good possibility" that the new products will include co-branded products, Kotsatos added. Last year, Boston launched its first co-branded home system, which featured compact Boston Acoustics speakers, a Kenwood-made DVD-receiver, and active equalization and crossovers tailored for the speakers.

The multimedia market will get less attention from Boston, Kotsatos said, because that market has "declined to commodity and entry-level [products]," whereas Boston's name is associated with "better products." Although Gateway does "a good job" of selling Boston speakers through its channels, he said, other retailers that sell PCs "couldn't articulate the benefits." Select A/V specialty retailers have had "some success" with Boston's multimedia speakers but not a lot, given that these dealers aren't in the PC market, he noted.

Despite that record, Boston's multimedia involvement has given the company "sophisticated electronics capabilities" that it can apply to the company's core home/car audio businesses, Kotsatos said. The company, for example, will launch its first branded car amplifiers, initially in June in overseas markets and then in the fall in the United States, he noted.

To boost its international sales, Boston plans in the longer term to rely less on international distributors and more on company-owned sales/distribution offices, Evelyn said. "We already have one sales office in Italy and a joint venture in the U.K., but it's premature to expand that. We need to start at the top first."

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