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Gibson VP/GM Outlines U.S. Consumer Strategy

ATLANTA – Gibson Brands continues to raise its consumer electronics profile.

The privately held company, previously known for its musical instruments and pro audio equipment, acquired the Stanton Group in December 2011, including the Cerwin Vega home and pro-audio speaker businesses as well as KRK Systems’ pro-audio business and Stanton DJ’s professional-DJ equipment business.

In early 2012, Gibson purchased 51 percent of Onkyo USA from Japan-based Onkyo and became Onkyo Japan’s second largest shareholder by buying about 15 percent of that company’s shares. In May 2013, Gibson closed on its purchase of a 54 percent stake in Japan’s Teac, which offers consumer and pro audio and other electronics.

Then in June 2014, the maker of iconic Gibson guitars acquired Woox Innovations — the former audio, Blu-ray, multimedia and accessories manufacturing and marketing business of Philips. And in January, Woox announced a distribution and development deal with Onkyo to develop Onkyo-brand headphones and Bluetooth speakers.

In April of this year, Gibson Brands will launch a dedicated sales and marketing organization, Gibson Innovations USA, to markets select products in the U.S.

With the most recent changes in mind, TWICE asked Todd Richardson, executive VP/general manager of the new Gibson Innovations USA group, to piece it all together and outline his group’s responsibilities.

Here’s what he had to say:

TWICE: What role does Woox Innovations play within the Gibson Brands corporate structure?

Richardson: Gibson Brands has a strong portfolio of music brands across the full journey of creating, recording and experiencing music. Gibson Brands acquired Woox Innovations — the former audio, video, multimedia and accessories business of Dutch technology giant Philips — in June 2014. In 2015, Woox Innovations is changing its name to Gibson Innovations, and we’re essentially now that consumer division of Gibson Brands, alongside its pro-audio and musical instrument businesses.

TWICE: Woox Innovations has a distribution and development deal with Onkyo to develop Onkyobrand headphones and Bluetooth speakers. When will the jointly developed products debut in the U.S.?

Richardson: We’re really excited to be working with the Onkyo team. It’s a long-term partnership, and initially we’re focusing on headphones (wired and wireless) and Bluetooth speakers. For these product categories, we’re scheduled to launch our first products in the third quarter of 2015. We’ll be managing the distribution of these new categories, but it’s important to be clear that Onkyo will continue to be responsible for managing the global sales of its established portfolio, including home cinema systems and A/V receivers.

TWICE:How will the products under the Onkyo distribution and development deal be positioned, and what distribution channels will they be targeted to?

Richardson: Onkyo has a great heritage, advanced technology capabilities and a strong brand. We will be selective in our approach to market products that inspire and represent the Onkyo brand and align with Onkyo retail partners that can communicate the Onkyo value proposition.

TWICE:Will there be channel overlap with other Onkyo-brand products, such as A/V receivers?

Richardson: Yes.

TWICE: What other Onkyo-brand products will Woox and Onkyo co-develop? Wi-Fi multiroom-audio speakers? Blu-ray and 4K Blu-ray players? A/V receivers and other component-audio products? Soundbars or HTiBs?

Richardson: Right now we’re focusing on headphones and Bluetooth speakers. In the future we’ll also look at other opportunities in connected speakers, including Wi-Fi multiroom audio. Onkyo will continue to be responsible for managing the global sales of its established portfolio, including home cinema systems and A/V receivers.

TWICE: What entity within Gibson Brands will market the Onkyo-brand products developed under the Woox-Onkyo partnership? How will it go to market?

Richardson: Gibson Innovations USA will be responsible for distributing the products developed under the Onkyo brand, utilizing our own go-to-market routes.

TWICE:Is Gibson Innovations USA also responsible for marketing select Philips-brand audio products previously marketed in the U.S. by P&F USA?

Richardson: Gibson Innovations USA officially goes live on April 1 and will be responsible for headphones, Bluetooth speakers, audio playback speakers, accessories, a new range of DECT cordless phones, and other new products that will be announced in the coming months.

To drive growth, we are changing our go-to-market approach in North America, moving away from a distributor model and setting up a dedicated sales and marketing organization to engage with customers and consumers. We’ll work closely with the current distributor of Philips-branded audio, home entertainment and related accessories in North America — P&F — to ensure a smooth transition over the coming months.

The distribution agreement with P&F was started in 2012 with Philips. In a separate agreement between Royal Philips, Funai Electric and Funai affiliate P&F, Funai has a license agreement with Royal Philips for TV, Blu-ray, Blu-ray- or DVD-based home theater systems, and soundbars. [Editor’s note: Funai/P&F USA is responsible for the sourcing, distribution, marketing and sales of those products in North America in a deal that expires at the end of 2015, a Philips spokesperson said. Philips has begun initial discussions on renewing the deal, which began in August 2008.]

TWICE: How long does Gibson’s brand-license agreement for audio last with Philips?

Richardson: The license agreement is for an initial period of seven years. Of course, the agreement with Philips is more than just the license – it’s the full transfer of a business that has more than 1,900 fantastic employees worldwide, selling in more than 100 countries and with more than 2 million product shipments every week. As part of Gibson Brands, we have a strong mandate to grow our Philips and other-brand businesses, both globally and even more so in the USA, where we see a strong opportunity.

TWICE: Are there any other brands that Gibson Innovations USA will be responsible for? For example, the Trainer by Gibson health-focused brand, Gibson-brand headphones and speakers, GoGear headphone and Bluetooth speakers, the Les Paul brand of active speakers?

Richardson: Gibson Innovations USA will be responsible for Gibson Brands’ consumer electronics portfolio. That includes the Gibson headphones and speakers that we showcased at CES, the Trainer by Gibson brand, and the GoGear brand.

Where possible, we will work across sales teams, like the musical instrument team, to reach Gibson dealers.

Trainer by Gibson was created in partnership with Usain Bolt, the six-time Track & Field Olympic Gold medalist. It is a new health-focused brand that captures the essence of Gibson’s heritage of innovation, quality, design and technology. The first Trainer product is a pair of headphones that incorporate innovations never before brought together in one device.

Gibson, the acclaimed architect of prestige guitars that are as American as rock ‘n’ roll, for over 120 years has pioneered the highest-grade fretted instruments that tell stories of original thinking, the finest materials and workmanship, and trailblazing technologies. At CES 2015, we showcased a range of Gibson headphones and speakers that captured the spirit of the brand.

GoGear is a fresh, energetic and fun brand targeted toward consumers who are young at heart and expect value for money. The GoGear range includes in-ear and headband headphones as well as Bluetooth speakers.

TWICE:At CES, Onkyo hinted at launching an Iron Maiden-brand headphone line. Will Gibson Innovations USA market that too?

Richardson: The partnership is between Iron Maiden and Onkyo ( Gibson Brands has a financial relationship with Onkyo, but at Gibson Innovations, we do not currently have any plans to market these products.

TWICE: Have there been any leadership changes at Woox (Gibson) Gibson Innovations since it was purchased by Gibson last year from Philips?

Richardson: Our leadership team remains broadly the same, with our CEO, Wiebo Vaartjes, at the helm. The global headquarters of Gibson Innovations will continue to be based in Hong Kong. Of course, as part of Gibson Brands, we’re benefitting from sharing knowledge and ideas across our diverse global team.

TWICE:Who are the members of the Woox (Gibson) Innovations U.S. sales and marketing team, and what is their experience?

Richardson: The key leadership team members are me as executive VP/general manager and Keith Michael as VP marketing North America. We both have extensive CE backgrounds and a strong tie to the Philips brand name.