Premium Audio Company (PAC), a subsidiary of Voxx International Corporation (Nasdaq: VOXX) and soon to be a subsidiary of Gentex Corp. (Nasdaq: GNTX), announced that it is entering into a “strategic partnership” with the National Alliance of Trade Merchants (NATM). PAC calls NATM “a leading national buying co-op of top independent retailers in the United States.” The move appears to be a pretty transparent effort to replace sales volume lost when major buying group ProSource dropped all PAC brands from its list of supported products.
Is this new partnership a good alternative? Read on…
See more on Premium Audio Company partnering with NATM
The announcement by PAC calls this agreement “a significant milestone for NATM, as PAC becomes its first major audio partner.” This is your first clue to the potential value of this deal for PAC. The formal announcement goes on to add that this development means that NATM is “significantly expanding [its] presence in the consumer electronics sector.” That statement is yet another clue as to the potential economic value of this agreement for PAC.
Just Who Is the National Alliance of Trade Merchants?
We are excited to welcome Premium Audio Company and its legacy brands, Klipsch and Onkyo, to the NATM family. Their dedication to high-quality audio and market growth aligns perfectly with our mission to provide members with premium products and strategic support. We look forward to a successful, long-term collaboration.
John Riddle, NATM Executive Director
So just who is the National Alliance of Trade Merchants? NATM was formed in 1970 and consists of 11 member companies around the US, with most members represented in multiple locations. Many NATM members offer large- (or extremely large-) format retail footprints with multiple product categories stocked and sold. They are also generally located in major metropolitan areas.
A Focus on TV/Appliance Business
For the most part, NATM members are focused on TVs, appliances, furniture, bedding, small household appliances, as well as more mass market-oriented consumer electronics products, such as headphones, Bluetooth speakers, portable audio products, and the like. While some of the NATM companies possess significant retail market power, for many of them, high-performance audio or custom integration is not a category of significance for them…if they are in it at all.
The announcement by PAC belies that this is a different kind of market scenario for their brands – “This partnership reinforces PAC’s commitment to expanding the premium audio marketplace…” Or here: “By joining forces with NATM, PAC aims to provide industry-leading audio solutions to a wider customer base…” [Emphasis added]
An Increased Market Presence
We are thrilled to partner with NATM and its esteemed members. NATM has a long-standing reputation for driving growth and innovation in the audio industry. We believe this partnership will create new opportunities to increase the audio business, while ensuring that our retailers have all the resources needed to grow and succeed.
Paul Jacobs, Premium Audio Company CEO & President
PAC summed up its announcement here: “With NATM’s extensive network of regional retailers and PAC’s industry expertise, this partnership sets the stage for increased market presence, enhanced retailer support, and expanded access to world-class audio innovations.”
A Good Alternative to ProSource?
But is NATM a good alternative to ProSource for PAC? Let’s consider that for a moment. I profiled NATM above, so how about ProSource?
ProSource is a national network of 575 member companies. The ProSource membership is multi-format, with some large volume retail and online members. However, the vast majority are geographically distributed custom integration companies. Some ProSource members have multiple locations.
A Big Part of What They Do
With its concentration of residential custom integrators – including luxury custom integrators serving the high-end client – ProSource members are very involved in specifying, selling, installing, and servicing large and sophisticated audio/visual systems. High-performance audio is very much a big part of what they do.
In reality, Premium Audio Company was backed into a corner. Losing ProSource threatened to cause them to lose national market visibility. By signing with another national organization like NATM, PAC brands Onkyo, Integra, and Klipsch regain national market presence.
Will NATM Replace the Lost ProSource Volume?
If past is prologue, the NATM members, by virtue of their market power will sell some component audio products, even though it is not a focus category for them. But it is unlikely purchases will equal the business PAC did with ProSource…a partner whose group profile is more focused on audio as a key category.
Time will tell how this all plays out.
For More Information
See more on PAC brands: Onkyo at onkyousa.com… Integra at integrahometheater.com… and Klipsch at klipsch.com.
Learn all about NATM at natmorg.com.
Almost all the NATM members are already Klipsch and Onkyo dealers. The one place that might be expected to do well with Integra, Abt, already carries them.
We have been a Klipsch dealer since 1972 and a BrandSource (remember HES?) member since ’99. Do you think we’d change our lineup just because there won’t be rebate checks from the group? Onkyo, too but of less importance. Personally, I think it was an unpopular decision with a number of ProSource members.
Hi Steve,
Nice to hear from you again. It’s been a long time.
Re: Personally, I think it was an unpopular decision with a number of ProSource members.
I’ve heard this from a few ProSource members. And complaints that they never received a genuine explanation for why the group took such a drastic action.
Glad to hear you still support Onkyo!
Ted