Grande Holdings Forms Joint Venture to Boost Akai Brand
Grande Holdings and ES International (ESI) formed a joint venture and are expected to sign a 20-year agreement designed to strengthen Akai Product Holdings’ hand in the CE market. The joint venture, to take effect formally Feb. 1, will be headed by former JVC executive Harry Elias as chairman, while current Akai COO Gary Lafferty shifts to pres.-CEO, company officials said.
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The joint venture grew from a licensing agreement for the Akai brand that Grande struck with ESI 3 years ago and which had 2 years remaining, Lafferty said. Akai Product Holdings was spun out from ESI, but the company continued to provide back office support, he said. “The new agreement is further-reaching, both as it applies to us and to retailers, because they have to think how much support they want to give to a brand that may only be around a few years,” Lafferty said.
Since taking over as full-time COO in early 2004, Lafferty has expanded Akai’s dealer roster to 30 accounts representing 1,500 stores, with Circuit City the largest. Akai also has signed 7-8 regional chains including Conn’s, H.H. Gregg and American TV & Appliance with a goal of eventually expanding that roster to 10-12, Lafferty said. Elias’s role will be to forge ties for the Akai brand with retailers by drawing on his 37 years’ experience at JVC, Lafferty said. Elias, who wasn’t immediately available for comment, left JVC as honorable chairman Dec. 31. He joined Akai Jan. 1.
Akai will continue with 3 sales vps targeting regional and national CE chains as well as mass merchants, Lafferty said. Chris Nakamura, a former Nakamichi staffer, was hired as product manager charged with overseeing Akai’s growing array of TVs and DVD products. At CES, Akai introduced its much-delayed DLP-based 46W rear projection ($2,299) scheduled to start production this month and is weighing the addition of 50W and 52W sizes, Lafferty said. It’s also dropping 15” and 17” LCD TVs to focus on 20” ($499) and up sizes, including 26W and 32W sizes.
“It’s very hard to remain competitive” in the 15” and 17” sizes, Lafferty said, explaining the reasons for discontinuing the smaller models. Akai also is continuing to market 50W and 42W ED and HD plasma TVs that will be available in a range of designs. Akai’s entry-level 42W will likely be priced around $1,799-$1,899, while an HD version carries a $2,500 retail, Lafferty said. It will add 26W ($699) and 30W ($799) direct-view sets in April and continue with CRT-based rear projection TVs (42W, 47W and 52W) with $999-$1,199 retails.
Akai will likely rely on ESI’s Global Sourcing to procure components and Grande for assembling them into finished goods. Grande, whose licensing portfolio also includes the Nakamichi and Sansui brands, assembles LCD and plasma TVs at factories in the Far East. Grande greatly expanded its production in the early 1990s with the acquisition of Capetronics, which ran 14 factories at the time.
Akai returned to the U.S. market 3 years ago, having been absent since the late 1980s when it pulled out except for professional audio products and musical instruments. Akai was caught in cross-fire when the yen took a hit in the mid-1980s. It was bailed out by Mitsubishi, which accumulated 8% of its stock and took over product sales in U.S. briefly in 1986. Semi-Tech hinted at plans for an Akai consumer products revival in U.S. several times, most recently in late 1997 with DVD players and plasma displays. But it abandoned the strategy 2 years later when it purchased Akai sales subsidiaries in France, Germany and U.K. Akai, which was controlled by Hong Kong Tycoon James Ting, was ordered into liquidation in 2000, owing creditors more than $1 billion. It later emerged as a brand controlled by Grande Holdings, which had ties to another of Ting’s firms, Semi-Tech.