Classical Thinking

Acoustic Energy, a British manufacturer based in the Cotswolds, opened its doors in 1987 and quickly garnered acclaim for its flagship speaker, the AE1. Over the years the company has produced pro-grade hi-fi speakers and expanded its brand to more than 50 export markets, including a recent re-entry in the U.S. market with a custom installation focus. Moses Gabbay, Acoustic
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ACOUSTIC ENERGY BRINGS WORLD-CLASS VERVE TO U.S. MARKET

Acoustic Energy, a British manufacturer based in the Cotswolds, opened its doors in 1987 and quickly garnered acclaim for its flagship speaker, the AE1. Over the years the company has produced pro-grade hi-fi speakers and expanded its brand to more than 50 export markets, including

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Roundabout Theatre Company’s Sunday In the Park With George used Zaxcom’s TRX900 digital wireless microphone systems. (Photo Credit: Joan Marcus) a recent re-entry in the U.S. market with a custom installation focus. Moses Gabbay, Acoustic Energy North America’s CEO and president, spoke to RS about the company’s newest efforts to outshine the established competition.

Acoustic Energy is making a push in the U.S. custom installation channel. Why the renewed focus on this region?
I believe a gap exists in the market for true high-end audio speakers in the custom installation market. Our goal at AE is to always be at the forefront of current and future home audio business trends around the world. CI is the driving force in the U.S. marketplace, so it only makes sense for a brand that is highly respected and relevant to the audiophile and professional communities to move into such an important area. Now that we offer high-performance CI products, we are able to broaden our appeal and relevance to the independent custom installation business community.

What measures have you taken to reintroduce the brand to this sector?
Our approach centers on the following business drivers: product, distribution, and promotion. First, we developed a CI product line that reflects the AE heritage for hi-fi sound, and high-quality fit and finish. Extra measures were taken in the development of our CI products to ensure that these products contain pure AE DNA. The result is a line of in-walls, in-ceiling, and all-weather loudspeakers that faithfully reproduce AE’s signature sonic characteristics of timing, transparency, and accuracy. To be honest, this is the best-sounding product that I have personally developed. Period.

Second, we are focusing on independent specialists who currently use distributors and mass-appeal brands for their staple products but have a need for a reputable, fullline loudspeaker brand to service their high-end customers. We designed our dealer programs to be simple and appropriate to the business model in practice. Our channel partner profit structure is

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competitive, and our freight policy, in combination with our bi-coastal distribution centers, allow “just-in-time” delivery, so our channel partners never have to stock our products.

In these trying economic times, what opportunities do you see in the sector?
In my experience, as purchasing power diminishes in a slow economy, a flight to premium products arises because consumers are seeking that one “classic” buy that will have lasting significance. Historically, the AE customer looks to “classic” products that represent timeless heritage, bulletproof build quality, and long-term satisfaction. This is exactly what we strive for and deliver in our CI products. Moreover, business alignments are changing. Brands once associated with specialists are expanding their distribution in order to sustain their needs. A number of prominent brands have either been absorbed by larger competitors or have simply gone out of business. CI companies have gone through a similar process.

With margins getting slimmer, where can dealers using AE products find profit growth?
Differentiation: I believe the sum of our parts and our engineering expertise can deliver excitement and content above the norm and therefore create a higher return on investment. Distribution: I want our dealers to be competitive with our products, not over our products. Diversification: By balancing the needs through product offerings for home, personal, and the professional markets, we can meet customer expectations and company objectives without conflict.

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