<April 25, 2012> In a narrative that at times was more daytime soap opera than strategic corporate initiative, Russound has disposed of Colorado vNet for the last time, selling the brand off to Vice President of Sales and Marketing Mike Anderson. This ends a problematic history with Russound acquiring, closing down, relaunching, and now selling off Colorado vNet in a short on-again-off-again three-year relationship that started in 2009.
“It’s all good,” Russound’s PR rep told us, saying that Anderson was excited to acquire the brand…and Russound was happy to re-focus their energies on their core product lines. Hmmm…
Many in the industry questioned Russound’s decision to acquire Colorado vNet in the first place. First of all, Colorado vNet had already closed its doors before Russound acquired it. Secondly, Colorado vNet had a completely different sales model, selling their products direct to dealers while Russound takes a different approach – selling their products primarily through distributors. Thirdly, the companies were in two different product spaces which promised to stretch Russound management thin.
When first announced, the ALERT spoke with many in the industry who questioned the level of due diligence Russound applied when analyzing the opportunity. By the end of 2010, Russound, with little explanation, decided to shut down Colorado vNet. The decision seemed to suggest the critics had been right – the move had been an ill-advised one from the beginning.
But then, shortly after that decision came the announcement that – due to outcry from Colorado vNet dealers – the brand would be revived. The vacillation confused the marketplace. If dealer support had been so strong, why did Russound shut it down in the first place?
Now, by selling the company off to company Vice President of Sales and Marketing Mike Anderson [see picture at right], Russound appears to have made a final decision. In the same announcement, Russound talked about “getting back on track with its core business delivering high value electronics, speakers and accessories.”
Russound also says that it seeking a new “high profiled and proven Vice President of Sales” to replace Anderson. Somewhat mysteriously, the company says that it will soon announce “a strategic and tactical alliance with a renowned business development company.”
In a prepared statement, Russound CEO Charlie Porritt said, “As we unveil our plans over the next few weeks and months, dealers will see first hand that we are making long-term improvements to benefit all our valued customers.”
A separate statement was circulated to the press by Mike Anderson seeking to reassure the market that the deal is a done deal…effective immediately. And the new owner wants dealers to know that the company intends to “continue to offer its customers the same level of support and service.”
The statement went on to say that the two companies were working hard “to ensure a seamless transition.”
“As the VP of Sales for Russound and Colorado vNet, I’ve seen how the Colorado vNet brand has its own unique place in the market,” said Anderson in the prepared statement. “Colorado vNet integrators have needs unique to themselves and having the opportunity to set this company apart – under its own direction once again – is an opportunity to provide those integrators with the support they deserve.”
In a telephone interview with the ALERT Anderson seemed to hedge just a little when we asked him closely about the ownership – is he the sole owner, we asked. After a little hemming and hawing, Anderson replied: “I’m the sole owner of the corporation that bought Colorado vNet.”
Mouse to elephant ratio…
When we asked for further clarification, Anderson declined. “Colorado vNet was a technology that was not being utilized,” Anderson told us. “vNet was the mouse to the Russound elephant and they just didn’t have the time to tend to the needs of vNet.”
Anderson told us that Russounds preoccupation with their own business meant the Colorado vNet didn’t get the needed investment into product development. “We’re going to accelerate that investment,” Anderson said.
In fact, Anderson claims that the company will rollout a new product next month. And not only would they be introducing a new central controller next month, but they would be shortly introducing new iPad applications.
Clearly, Anderson gave us the impression that he wanted to hit the ground running. “This deal has been in the works for a couple of months,” Anderson said. “I’ve got a great team in Colorado and I’ve got a great team in New Hampshire and they’re ready to go.”
“A few people told me I should have my head examined,” Anderson joked with us. “But Colorado vNet is an incredible opportunity which is why I approached Russound with this deal.”
The official launch of the new Colorado vNet is set for June.