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Klipsch Makes Major Distribution Changes


Guest Joshua Ryan Hall

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You can't control the grey. You can find anything and everything grey. But the mojority of the people will buy from the local dealers because they can hear them, they don't have to wait for delivery, and they come with full factory warranty. Would you buy a new car for 300 cheaper with a so called store warranty over the factory one? I don't think so. If you look around the word is getting out about the problems with these internet sites and only the risk takers will be buying from them in the future.

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"The natural evolution will be converting many of our best Synergy customers to the ultimate in high-performance loudspeakersthe Reference Series."

I've heard the Reference series... the ultimate in high performance loudspeakers is the Heritage series. Enough said!

Tony

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"The natural evolution will be converting many of our best Synergy customers to the ultimate in high-performance loudspeakersthe Reference Series."

_______________END QUOTE>>>>>>>>>>>>>>>>>>

CAN'T DO THAT UNLESS THEY CAN a/b THEM............TOO BAD......AND JOE6PK STAYS THAT WAY!!!!!!!!

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Hey RefSeller, if I were the one selling reference speakers , you know what I'd if i was worried about customers not being able to a/b with synergy?

I'd buy a synergy system and have it in the store. Don't sell them, just have it available for customers to compare. Solves the problem. Synergy isn't that expensive, so it doesn't seem like a tremendous overheard.

-mkl

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we thought of that,but it would violate the spirit of the dealer agreement...we had a similar discussion about differant bose products........as for heritage products ,it took me 3 months to get a BLACK pair of HERESYS recently (since BEFORE THE ANNOUNCED CHANGES )and with all the synergys they'll have to buld under pressure to stock bb, don't look for tons of available refs soon either...

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----------------

On 3/3/2003 12:36:15 AM REFSELLER wrote:

and with all the synergys they'll have to buld under pressure to stock bb, don't look for tons of available refs soon either...

----------------

Well, maybe with all the money they make on the synergys they can afford to hire a bunch of new poeple to make REFs and Heritage. 2.gif

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moon, with all due respect, I wouldn't count on it . This decision was made to increase the bottom line and syphon funds from the company, adding mnfgring space and employees (especially well trained conciencious ones) will cost too much , but if they do I think they would put them to the project that makes the most money fastest...think of how many synergy spkrs are going to be needed just to put on the floor of all the bb's nationwide!...I would suspect that you will see more of the low end product eventually turning up with the "made in mexico" stamp.......

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I can't speak about Tweeter since I have no knowledge of them.

Magnolia Audio on the other hand, was a part of the Musicland Group that Best Buy purchased. Aside from Magnolia Audio, Musicland Group included: any surviving Musicland Stores; all Sam Goody stores; and Suncoast Motion Picture Company (a retailer of Videos and DVD's). Since the announcement of the purchase of Musicland Group by Best Buy, speculation has been about what Best Buy's plans were for these market segments. Their plans are now coming into focus. The initial speculation was that Best Buy wanted to close down all the Sam Goody and Suncoast stores (along with any remaining Musicland Stores) that were in close proximity to a Best Buy. Why? Because over the years, the Video/DVD and CD Music portion of BB's buisness has become increasingly more important. Eliminating the competition can only increase their buisness. That speculation seems to be coming true. Sam Goody and Suncoast are scheduled to be phased out.

I don't know the whole history with Musicland and Magnolia Audio, but I do know that there are no Magnolia Audio stores in the area or surrounding Musicland and Best Buy's home base (Minneapolis). I've heard that Magnolia is primarily a Canadian retailer. Best Buy does have plans for a Canadian expansion, but at this point apparently is not firm enough in its plans to officially announce any phase out of Magnolia Audio stores (though there was a major redesign recently that cut out a major and expensive feature of Magnolia's new stores). Cutting Magnolia out of the Klipsch sales market is probably the first phase of devaluing the chain before BB kills it too.

It seems clear that Best Buy wants to get back into a higher level of audio and audio/video sales. It seems that removing Klipsch from Magnolia and offering instead a place in the nationwide BB stores was a marketing strategy forced by BB, not by Klipsch. Klipsch, to its credit recognized how many Hi-Fi retailers that this move would affect (Including the Audio King division of Ultimate Audio that exists soley in the Minneapolis area). As I see it, Klipsch worked out a compromise that would allow them to keep a lucrative deal with BB AND maintain some of its best and most loyal retailers too.

Unfortunately, we all know about the BB reputation of cheap brands and cheap service. It is easy to see what hand BB had in the reintroduction of Nakamichi into the American market. Nakamichi labeled products with Goldstar like quality were an eyesore on the BB shelves for a year or so before Nakamichi had the good sense to buy back its name and have these pretenders removed from the BB stores. Will the same happen with Klipsch? I don't think many Klipsch fans would consider a speaker from the Sin-ergy line. Those of us who own Classic Klipsches from the days when the Heresy was the little Klipsch speaker have a hard time considering the Reference line as real Klipsch speakers (though I do value my RP-3s). The move to involve BB only cheapens the brand.

I also worry about the little Audio Store in my hometown of Cedar Rapids Iowa that used to sell Klipsch (and I think still does), but now has to contend with not only Ultimate Audio selling the same Klipsch products, but also Best Buy too. All these stores are less than a mile away from each other. Its hard to believe that this little store has survived until now. They dropped Adcom when Ultimate Audio moved into town, and have severely cut back on the Klipsch offereings too (though their store is one of the few Klipsch authorized dealers that I have seen a Klipschorn or Belle Klipsch in). They have maintained their relationships with B&W, Rotel, and Bryston. Their service department has been outstanding, and their sales people really love music. Unfortunately, I don't see that store surviving in a town where the metro area is about 200,000 people and the BB and Ultimate Audio stores are within a mile and more convienient to shopping areas.

Klipsch has become a pawn in the electronics marketing game. Gone is the headstrong independence of PWK and the low cost manufacturing based in Arkansas only. Klipsch has entered a new world. It remains to be seen if the product will be pulled down with BB cheap.

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cc1091 just a FYI, Magnolia is a West Coast chain. They are in California, Oregon and Washington. I don't belive they are a Canadian based company, I could be wrong but I don't think they are.

Great post. I really describes what happens in the computers and hi tech industry all the time. I have worked for several companies that have been gobbled up by larger companies. They tell you at first, "Oh we are going to be one great company together"... 6 months later your looking for a new job because they lied thier asses off to you in the beginning. Corporate world can be a very ruthless place to be. Sometimes I really wich I had become a forrest ranger a tour guide. Something that has nothing to do with technology. I would love to go run a mountian resort somewhere.

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I think it's good that Klipsch is branching out, but I share concerns with others here about (1) The company image of Klipsch by selling in discount mass market stores and (2) even more so, that people with no idea of Klipsch are going to hear only the low-end Klipsch items in these stores and not get a perception of Klipsch being an average products company, not having any idea of what the higher-end models are really capable of.

MORE THAN ANYTHING, I'd like to say that I'm very disappointed that Klipsch is no longer carried by military exchange stores, except for a few small items. I absolutely understand that military AAFES stores are an oddity in catering to a very limited customer group with limited merchandise. But this is how I started with Klipsch, learned how much of a value Klipsch is, and decided to buy all my major speakers to be Klipsch. If I had not, I'm positive that Klipsch would not be anything more to me right now than another A/V company that I have heard some good things about but really have no experience with, like Martin Logan. My $.02.8.gif

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Not knowing the underlying business decisions that drive decisions like this, I surely can't comment on it, but I DO know that I would never have been turned into a Klipsch fan w/o the opportunity I had at my local Tweeters where we auditioned RF-7's head-to-head with some much pricier speakers. I hope the new Klpsch distribution channels will not drop out this opportunity to showcase your products in any major (or minor) markets.

Best wishes,

Gordon

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I can only express my true dissapointment in loosing Klipsch as one of my favorite speakers to demo and sell. I just started working at Tweeter about 10 months ago, but have been an audio and Klipsch fan for as long as I can remember. I recently purchased a pair of Ref's and recieved them 3 days prior to the Co.-wide email saying that Klipsch is pulling out in 90 days. There are people in my Co. that are truly dissapointed in the desicion and the fact that it was taking place so soon. Tweeter has had a long relationship with Klipsch and I'm not sure what the outcome will be for either of us. I can only hope for the best for Klipsch, even though my personal opinion is that it's a mistake going to BB (just my opinion). I think it "cheapens" a name that has become synonomous with quality, performance, and dynamics. A veteran told me when I first started that I should own what I sell. I thought I had the best of both worlds. I will now have to re-think the what I have in my livingroom. Best of luck.

p.s. What's with the 3,500$ Klipsch/Samsung HTIB?? I hope Samsung does better with audio than they are doing with video, since there have been over 195 service issues with the new Samsung DLP TV in my region since hitting the floor in Nov. 2002.

sorry to see you go.

Mark-- A/V Consultant-- Tweeter

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"A veteran told me when I first started that I should own what I sell. I thought I had the best of both worlds. I will now have to re-think the what I have in my livingroom."

i have sold more than a few different types of products in my career as a sales professional....and that philosophy is o.k but not practical in the real world....

and more importantly....don't you want the best sound that you can afford in your own home????

i sell professional audio equipment, yet i listen to klipsch consumer speakers in my home....(KLF-30's)...because i love how they sound....

sell what you need to sell to make a living ....give your customers good value in terms of service and product and you will make a good living in sales.....but listen to what makes you happy at home!!!

russ1.gif

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mOOn- All I know about Magnolia is what was reported in the Minneapolis Star Tribune when the sale of Musicland to Best Buy was announced. The mention of Magnolia Audio in that article was almost an afterthought. The article gave the impression that Magnolia was originally based out of Canada before Musicland bought them (which I beliee was a fairly recent acquisition prior to BB acquiring Musicland). The article mentioned that Magnolia also had a number of stores throughout the Pacific NW. Now the information from the Star Tribune has been known to often be tainted with a regionalistic bias and notable inaccuracies (Like today's near foot of snowfall that was only supposed to be an overnight dusting..HA).

The info about the eventual closings of Suncoast, Sam Goodie and the scale back of the TV display wall at Magnolia is something you can take to the bank unless BB does a mid course 180.

Heres more from the local rumor mill about Best Buy:

There's a lawsuit that BB has to contend with where the land for their new "Best Buy Campus" of buildings at the corner of Interstates 494 and 35W in Minneapolis (actually Richfield/Bloomington area) was acquired from the original owner through a city condemnation process illegally (the lawsuit is a fact). The out of court settlement (just announced) will add another $9.5 million to the price the city offered the original owner for the land being condemned (bringing the total price to $18.5 mil). It is speculated (rumor) that BB will end up paying the full 18.5 mil to the city of Richfield +\- a few other under the table bribes. The rumor mill also has BB in debt to their designer/contractor/A&E firm for the cost of the buildings being built on that land. The local rumor mill now has Best Buy struggling to make payments on this debt.

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