Back in 2023, Strata-gee did a series of stories on Audio Research Corporation, a high-end tube amplifier manufacturer widely respected in the high-end community, but then going through financial struggles. In fact, when we last visited the Minnesota-based company, they had entered into a legal/financial process known as Assignment for the Benefit of Creditors (ABC), a form of receivership that is an alternative to bankruptcy. We revisit them now for an update.
Learn all about the latest changes impacting Audio Research & Acora Acoustics…
To add some more context to these latest changes, let me update you on Audio Research’s more recent history. As I said, back in 2023, the company, then-owned by Trent Suggs, had fallen into an ABC or Assignment for the Benefit of Creditors. In this situation, the debtor’s assets are transferred to a trust controlled by an assignee. The assignee’s job is to make all operational and financial decisions that result in all the assets being sold or otherwise disposed of in a manner that optimizes the payout to creditors.
As Audio Research was going through the ABC process, a potential buyer emerged who began discussions with Lighthouse Management Group (the ABC assignee). When an initial court hearing arrived, we learned that this buyer was Valerio Cora of Acora Acoustics out of Toronto, Canada. Cora offered a bid of just under $1.1 million for all assets, including inventory, patents, trademarks, etc.. Cora’s bid was accepted, and just like that, he had acquired Audio Research.
Not the Primary Buyer of Audio Research
However, subsequent to that court hearing, we learned that the buyer was not Cora alone. It turns out that he had a silent partner who was a major investor in the deal. At the time, I could not get Cora to reveal the identity of this partner for the record. But now, thanks to recent events, this financial partner’s identity is now known.
In any event, Cora, already CEO of Acora Acoustics, a high-end speaker manufacturer in Toronto, became CEO of Audio Research in Maple Grove, MN. And from this point in the middle of 2023 up to just recently, I haven’t heard much about Audio Research.
Leadership Transition – Cora Steps Down as CEO of Acora Acoustics & Audio Research
Then, just last week, a press release emerged from Acora Acoustics announcing a leadership “transition” and an intensive strategic business review of Acora Acoustics. Sources say this intensive business review also includes Audio Research. This press release would answer many questions about Acora Acoustics, Audio Research, Valerio Cora, and the mysterious unnamed financial backer of BOTH Audio Research and Acora Acoustics.
According to the release, titled Acora Acoustics Announces Leadership Transition and Strategic Review, Valerio Cora is no longer the CEO of Acora Acoustics, a company he founded. The release also noted that the company is embarking on a “strategic and operational review of its business, structure, dealer relationships, customer support commitments, and future direction.” This sounds pretty serious.
Crystal Claire Cosmetics is Majority Owner of Acora Acoustics & Audio Research
Cora’s departure from the CEO position is the leadership transition the title refers to. We learn that Crystal Claire Cosmetics, Acora’s “principal financial backer,” will provide direct oversight during a strategic review period. Crystal Claire is a Toronto-based cosmetics company with revenues of around $75 million. It turns out that Crystal Claire is the majority owner of both Acora Acoustics and Audio Research.
Crystal Claire, Acora’s principal financial backer, will provide direct oversight during this review period. The review is intended to give the company a clear and disciplined path forward while protecting the interests of dealers, customers, suppliers, and other stakeholders.
From press release: Acora Acoustics Founder Valerio Cora Steps Down from Leadership Role
Both Companies Continue During Strategic Business Review
The announcement says that operations will continue at both Acora Acoustics and Audio Research, which are separate businesses. However, as mentioned, Cora is out as CEO of both operations.
During the review period, the company will continue to communicate directly with its dealer network and customers, “as decisions are being made,” the announcement says, somewhat ominously.
Focus on Clarity, Discipline, and Stability at Acora
Acora Acoustics was built around a distinctive product vision and a commitment to high-performance loudspeaker design. Our focus now is to bring clarity, discipline, and stability to the business while supporting the dealers and customers who believe in the brand.
Roger Hwang, CEO of Crystal Internatiional Group
Dealers and customers with questions about any of this are directed to communicate with the team selected by Crystal Claire to lead this process. That leadership team includes Allan Haggar (for the U.S. and Canada) and David Schultz (International). However, no direct contact information was provided in the release to facilitate that communication.
Operations to Continue at Audio Research
The release did note that Acora Acoustics and Audio Research Corporation are separate businesses. It added that, “Audio Research’s operations, product development, dealer support, service, and warranty support continue independently.”
Then a story appearing in Stereophile by Jason Victor Serinus confirmed that most of what was disclosed in the press release regarding Acora Acoustics appears to hold true for Audio Research as well. There too, Cora has stepped down as CEO or as Serinus put it, Cora “…has been relieved of his responsibilities.”
Cora Was a Minority Investor in Both Companies
Also confirmed…that Cora was a minority investor in both Audio Research and Acora Acoustics. It identifies Roger Hwang of Toronto as “the major financial backer of private company Audio Research since 2023…” LinkedIn shows Hwang as CEO of Crystal International Group, a cosmetics packaging partner company to Crystal Claire Cosmetics. However, the Stereophile article notes he also represents Crystal Claire and Acora Acoustics.
As mentioned above, Allan Haggar remains Vice President of Sales, Global for Audio Research (and Acora Acoustics), while David Schultz remains Director of International Sales for both companies. Long-time “Brand Ambassador” David Gordon continues in this role going forward.
Looks Like Crystal Claire Cosmetics is Considering Options With Both Companies
Gordon told Stereophile that Hwang “is not a private equity guy who flips companies.” I got a similar off-the-record pitch from Cora back in 2023. I would say, however, that fact remains to be seen. It’s entirely possible that Hwang and Crystal have aspirations to become private equity investors, and Acora and Audio Research are their first foray into the field. Given this management shake-up and the launching of a “strategic review,” it looks to me as though Crystal Claire may be considering its options with these apparently underperforming investments.
In any event, Gordon also noted that both Evan Skucius and Les Robinson remain co-General Managers of Audio Research, in charge of day-to-day operations. The loyal brand ambassador seems to be suggesting that even though the CEO has been replaced, there is no disruption in management, as the company will remain even-keeled under the existing Audio Research managers still in place.
We’ll have to keep an eye on this situation to see what Roger Hwang decides to do with both Acora Acoustics and Audio Research.
For More Information…
See more on Audio Research at audioresearch.com.
Learn more about Acora Acoustics by visiting acoraacoustics.com.
Ain’t gonna be no comin’ back from this unless trying to exploit the name with inferior products. Even now sales ain’t healthy and the desire to move forward with Bill Johnson’s vision is long gone yes? Bill be rollin’ over in his grave. And really where’s the cachet for ARC to attract new buyers who don’t have white hair?