BREAKING NEWS Acquired by Sound United Two Years Ago, Then Gone
It was January 2018 when I reported that Sound United had completed its acquisition of Classé, an acquisition which had been first announced in December of 2017. In the weeks leading up to that December, former owner Bowers & Wilkins was considering getting out of the electronics business…maybe. After months of confusion, where on any day executives at Classé teetered back-and-forth between survival and demise – it now seemed that Sound United had thrown them a lifeline…a chance to live to fight another day.
And then they dropped out of sight for the last two years…
What happened to Classé?…
In July of 2017, Strata-gee broke the news that it appeared that Classé Audio was going to be closed, according to reports from multiple sources. It was presented as “mysterious” because this news came closely on the heels of the B&W Group – Classé’s parent company – having dismissed its president, Doug Henderson. There appeared to be tremendous turmoil at B&W Group, which had been recently acquired by EVA Automation, a Silicon Valley company that was tight-lipped about its restructuring.
Although B&W would only tell me that: “It is Bowers & Wilkins policy not to comment on rumors or speculation,” – on October 6, 2017, B&W did in fact close Classé. Employees were let go, the building was closed…the company was gone – kaput!
A Rollercoaster Ride
Then, on December 14, 2007, Strata-gee broke the news that Sound United stepped in to make an offer to buy the company from B&W. Sound United – which is owned by private equity powerhouse Charlesbank Capital Partners – had just acquired D&M Holdings in March and the company looked to expand its portfolio. It also appeared that they wanted a premier brand to top their stable of larglely mid-Fi brands, like Denon, Marantz, Polk, Definitive Technology and Boston Acoustics.
Various stakeholders in Classé must have felt they were on a rollercoaster ride, from low-lows to high-highs…and back. At times, my various sources were excited, disappointed, and then exhuberant again.
In a telephone interview earlier this week, Dave Nauber – past President of Classé, now Brand Director-Classé for Sound United – sounded relaxed and optimistic. Classé, he told me with a lift in his voice, is just about ready to launch its new Delta series of amplifiers and a preamplifier. It has, he admitted, been a long road…longer than anyone had originally anticipated.
Why Did Classé Disappear Two Years Ago?
At the beginning of 2018, it looked like fortune was again smiling on the good folks of Classé. Like a phoenix, they rose from the burning ashes of the company that had been nuked by B&W. Company President Nauber was putting essentially start up plans together and set about hiring back many of the previously dismissed engineers and employees. The future looked much brighter then.
So why, then, did Classé disappear from view two years ago? And why have we heard virtually nothing from them since? Nauber understood my confusion. And the answer to this mystery was two major obstacles that yet needed to be overcome…and they were bigger than anticipated.
Back when Strata-gee announced that Sound United had closed on their acquisition of Classé there was precious little information on just what the next steps would be. Unfortunately, Sound United had not been able to close the deal while the company still existed – and this would lead to their first major challenge in getting the company restarted.
Obstacle #1 – Build New Engineering Center
Nauber told me that the company had several new models they had been engineering for some time called the Delta Series. The company was excited about their new Delta Series, which some felt represented a new, more upgraded approach. But the engineering for this line was not complete, which meant that the first obstacle to overcome was to build a new engineering center so that Classé engineers could finish the engineering work on the new Delta Series.
“We had temporary offices, but that’s just not efficient in the way that a real facility is,” Nauber told me. So while they prioritized building a new Engineering Center, this added several months to the process – before the engineers could get back to the work of finishing the necessary engineering on the new Delta line. The project “…was just taking longer than we thought it would to get moved into our new place,” Nauber added.
Obstacle #2 – New Parent Company Requirements & Standards Were Substantial
It was inevitable that the team at Classé would need to adapt to the different design & manufacturing systems, processes, and standards at Sound United. Here too, those differences turned out to be way more significant than first anticipated. In fact, these processes and company “standards” were so significant that it added a substantial start up delay for these first models.
“The design and manufacturing process at Sound United is, I’d would call it, highly developed. It’s finely tuned. When you have a system like that, a process like that, you can’t just drop something into it and say, ‘Here, build this.’ What ultimately ended up happening was we didn’t just slip it into production as we thought we would, we really went back to the beginning and put the products through all of the processes that a Sound United product would go through on its way into production.”Dave Nauber – Sound United Brand Director – Classé
This new process for the newly acquired company was a little bumpier for this first set of products, which had already had a good amount of engineering done in accordance with their previous set of systems and standards – some of which conflicted with Sound United’s standards. With new products going forward, this will no longer be an issue, as these standards will be implemented by Classé engineers and management from the beginning.
Of Sound United: ‘Their Standards are Super-High’
“The nature and the degree to which they [Sound United in Japan] do testing is second to none. Their standards are super-high…I am absolutely confident that these products have been tested beyond the limits that any high end product in the world has been tested. There’s absolutely no question in my mind.”An emphatic Dave Nauber (emphasis in the statement is his)
At first, I found this concept to be surprising. My assumption was that a high-end line like Classé surely must exceed anything a mid-level company like Sound United might be doing. But Nauber explained to me that companies like Sound United – which typically have much higher production runs than your average high-end line – must be doubly careful. A small issue can be easily corrected for a high-end company with their lower number of outstanding units. But when you have the kind of production run that a Sound United has, a small problem can very quickly become a large problem. For this reason, they set strict standards on a variety of variables that most high-end companies don’t consider.
Some might consider this level of testing beyond that which is reasonable – perhaps even redundant or unnecessary. Sound United engineers test for potential product issues that the vast majority of their end-users will never face. But this over-testing, if you will, helps ensure the overall high level of quality of their products. Nauber sounded truly impressed with the level of standards Sound United maintains.
The Light at the End of the Tunnel
So that’s how, before you know it, two years have slipped by. Classé had sold through all of their remaining inventory in the first 9 or 10 months after the acquisition. This means that they have had nothing to sell for more than a year. That is a lifetime in this industry.
The process to get to this point was a long and arduous one, but Nauber was clearly heartened by the fact that he can clearly now see the light at the end of the tunnel – their reintroduction into the market in the first qurter of 2020, just about 60 days from now.
So the mystery is solved – Classé is back with an all-new, better than ever line from a company committed to provide the best.
Learn more about Classé by visiting: classeaudio.com.