Michael on the Podium: The hi-fi brand merry-go-round

By Michael Jones

April 2009

Michael on the Podium The past several months have seen many changes in hi-fi brand distribution in New Zealand, making for the biggest shakeup in the industry for many years.

So why should I care?

The brands of hi-fi that you see in your local shop have as much to do with the relationship between that shop and a distributor as they do with the brand itself. A retailer often has close relationships with a limited number of distributors and is most likely to select brands from those distributors.

So which brands you see presented to you can depend a lot on who the distributor is.

The electronics go-round

Manufacturers of brands can and do change local distributors. But the real action started late last year with several electronics brands swapping distributors in a domino action.

First, Audio Products Group (APG) acquired the New Zealand distribution for the Denon brand. This wasn’t a great surprise as APG was also the distributor for Denon in Australia. This left the previous Denon distributor, Eastern Hi-Fi Group (EHF) without an electronics brand.

This set off the domino effect. Earlier this year EHF announced that they had acquired the distribution rights for Onkyo, a Japanese AV brand. Former Onkyo distributor B&W NZ then acquired the distribution rights for Marantz, leaving former Marantz distributor Wildash Audio currently with no electronics brand.

Additional changes

Last year two distributors effectively swapped loudspeaker brands. Audio Products Group were distributing Energy and Mirage speakers and Sound Group Holdings (SGH) were distributing PSB – all Canadian speaker brands.

Overseas ownership changes started the ball rolling. US speaker giant Klipsch purchased the parent company of Energy and Mirage and changed the distribution here to existing Klipsch brand distributor SGH. The PSB brand then went to Audio Products.

Other recent changes include Loewe moving from long-term distributor Interdyn to APG.

So what does this all mean?

When the distributor of a brand changes then often the retail presence for that brand changes. Distributors have preferred retailers that that deal with, just as retailers have preferred distributors that they want to do business with. So if a brand changes distributor then a brand could change retailers as well.

A good example is with Onkyo. Onkyo was rarely seen in hi-fi specialist stores when distributed by B&W NZ. Now that Onkyo has a different distributor the brand is now featured in all of the Eastern Hi-Fi and associated stores. And while the Eastern Hi-Fi stores previously stocked Denon, this writer understands that the Eastern stores are not replacing Denon models as they sell.

So don’t be surprised if brands have changed next time you go into your favourite hi-fi specialist. The changes are likely to have more to do with business decisions than product quality.

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