LINCOLNSHIRE, ILL. — Zenith Electronics is selling its accessories business to Gemini Industries.
Under an agreement in principle, Clifton, N.J.-based Gemini will acquire the assets of Zenith Accessories, based here, and enter into an exclusive long-term agreement to license the Zenith brand for accessories products sold in North and South America.
The transaction — terms of which were not disclosed — is expected to be completed sometime between mid-June and early July, and is subject to the execution of the definitive agreement.
Zenith, which offers accessories in a number of categories — remote controls; antennas; audio and home theater; video, media and maintenance; digital and satellite cables; telecommunications; security cameras; and wall mounts and TV stands — said its prime reason for the sale is to focus on its core digital strategy.
At the same time, the company said it has found a partner in Gemini, which will continue to grow the Zenith-brand business, while, concurrently, sharing the Zenith-brand strategy.
Zenith retailers will benefit significantly from the powerful combination of the broad Zenith-brand accessories product line and Gemini’s marketing and distribution capabilities, Len Coakley, VP of accessories at Zenith Sales Co. told Zenith accessories dealers in a letter explaining the deal. The goal is to have a consistent brand strategy across all product lines carrying the Zenith name, Coakley said.
Zenith Accessories had been on the sales block for some time, according to John Taylor, Zenith corporate VP and company spokesman. “We were looking for the right partner; there was a lot of interest from several parties. Gemini offered a strategic fit,” Taylor said.
“This is a growing business,” said Taylor about Zenith Accessories, “with annual growth of about 15 percent per year for the past three years. We’re expanding into new markets; we’re offering more SKUs. Yet, this business was not core to the digital arena.”
Taylor expects Zenith to have an ongoing interest in its partnership with Gemini, such as the maintenance of brand position in alignment with marketing themes, as well as team decisions about future products and co-marketing with Zenith mainstream CE.
Gemini, founded in 1964, offers more than 2,500 audio, video and phone accessories sold under the Philips Magnavox, Magnavox, Southwestern Bell Freedom Phone and Gemini brands. The company was acquired by York Management Services in June of 2000.
Said Michael O’Neal, Gemini president, about Zenith Accessories, “This is a solid business, with an exciting product line, excellent customer base and superb brand recognition.”
As for ongoing commitment to retailers, O’Neal said, “We will support the [Zenith] programs and products in place, products sold or in position to sell.”
Calling the Zenith accessories line “complementary” to that of Gemini, O’Neal said he does not expect any great overall change. But, “we haven’t closed the transaction yet; this happened very quickly, and there are a lot of things we have yet to figure out.
“We will offer [retailers] the same stability and service” that Zenith did. “We both have strong brands, strong niches.” In categories where Gemini is dominant, such as audio/video accessories, O’Neal said there could be some change.
The similarities in the two companies — both source product and maintain sales and marketing operations, both have similar product and packaging — also adds up to “not much will change,” O’Neal said.
As for Zenith’s 11 employees, O’Neal said Gemini was “talking with them about the fit,” and that he is optimistic “a number of people could be Gemini employees.”