MI Pro

John Hornby Skewes might appear to be much the same as it’s ever been, but the changes the company has seen recently (not least Dennis Drumm being managing director), have been fundamental and wide-ranging. Despite this, Gary Cooper discovers, it is an independent, family business first and foremost…

John Hornby Skewes – the ubiquitous JHS – holds a special place in the UK’s MI industry. It isn’t the country’s oldest wholesaler/distributor and it’s not the biggest, but it is the core supplier to so many retailers, particularly independents, that what it does has far-reaching effects for the trade.

Started by the eponymous John Hornby Skewes, who still plays an active and vital part in guiding the company, today the business is also being steered by Dennis Drumm, who has made some distinctive contributions to the JHS style – not least the development of the increasingly potent Vintage range, but also the nurturing of a thriving pro audio side, with brands such as HK, Lab.Gruppen and, most recently, Allen & Heath.

Simply offering a wide range of products is not enough though, as the number of wholesalers that have risen and fallen down the years testifies. What got JHS to the top, and has to be maintained to keep it there, is a good reputation.

I begin by asking Dennis Drumm what sets JHS apart from its competitors.

“‘The Family Company’ is an interesting concept,” he replies, “which is just what JHS is, always has been, and hopefully always will be.

“We’re an ‘independent’, just like the majority of our music trade customers. In fact it’s arguable that the musical instrument distribution and retail business is the last remaining unconsolidated consumer goods sector in the UK marketplace and it’s best served by enthusiastic, knowledgeable, independent distributors and resellers, selling to like-minded, independent consumers.

“JHS comes from the same humble beginnings as most of our customers; we were all ‘start ups’ once, and over the years we’ve suffered all of the same ups and downs and trials and tribulations as our customers tell us they face. We’ve used, and continue to use, those experiences to respond positively and sympathetically as we are growing our business. We work with our customers to help them to grow their businesses, and it’s been terrific to have contributed to the growth of so many great ones over the last 45 years.”

Fine words, but what does this actually mean for the retailer struggling in an increasingly tight business environment?

“We employ great area sales managers, who have terrific relationships of trust with our customers. Through our field sales force, we listen intently to what our customers tell us they want, and, by and large, we give it to them. The message that comes back to us is that stability, fairness, transparency, value, and above all, trust, are all hugely important.

“Offering a programme of high-profile distributed and proprietary brands with high demand, great value to the consumer and strong benefits to our customers in terms of service levels, product quality and, of course, high dealer margin are also paramount.

“I know some will take issue with some of those claimed attributes, and satisfying 100 per cent of the audience, 100 per cent of the time can only ever be a goal, but our stability is built upon 45 years of trading. We are a feature of the international music business landscape, and in the UK and Ireland, and we’re the supplier of first choice for many dealers, for very good reason.”

Which doesn’t, Drumm admits, mean that JHS never makes mistakes. “Do we foul up occasionally, get things wrong, cause upset, say or do something incorrectly, ship the right thing to the wrong place, ship the wrong thing to the right place, tread on someone’s toes, fail to live up to a promise, or someone’s expectations? Sure, of course we do – show me an organisation that doesn’t.

“But do we care? Deeply. Do we learn? Absolutely! Do we respond adequately, and with humility? You bet we do. All of this is a result of a business ethic which pervades our organisation, emanating from the top of our company and our chairman and founder John Skewes. Our ethic is predicated on the fundamentals of good business practice: play fair, support the community you serve, listen to your customers and give them what they want.”

Much of this, of course, would be said by anyone trying to persuade a retailer to do business with him but, it has to be said, JHS does have a reputation in the MI trade for honest, plain dealing. This matters particularly in the area of pricing, where the issue of discounting remains the hottest of potatoes. How important does Drumm think that is?

“Fairness and transparency are deeply ingrained in our business model, with a very
clear and ethical trading policy, a level playing field pricing structure, visible in plain sight to all. Our customers know where they stand and I believe our policies are able to bring a measure of equilibrium to a sometimes turbulent and ultra competitive market.”

Drumm also sees a cost advantage for retailers in JHS’s product breadth. “We’ve got the award-winning Odyssey brass and woodwind, Antoni stringed instruments, Performance Percussion, Kinsman cases and accessories, Guitar Tech, GYC – these are all products which help a dealer use us as a one-stop shop, reducing costs, saving them time, making their lives easier, and making them more margin.”

To an observer interested in how the MI industry works, one of the most interesting developments at JHS in recent years has been charting the growth of the Vintage brand, in particular the company’s efforts to leverage it way beyond the traditional role of distributors' ‘copy lines’ to being an aspirational brand in itself. It’s an enormously difficult task, but the company has made some significant headway in that direction.

“The value we build into our proprietary brands is probably best evidenced by Vintage, which we’ve grown from a small ‘me too’ range, launched ten years ago, into a major international brand, sold in some 60 markets. This has been achieved by building in true value – the blend of specification/price/profit – yet many of the brands with which we compete seem unable, or unwilling to do so.

“Our motivation with Vintage is simple: players, especially at the beginning of their careers, deserve the best our industry can provide to them, not a compromised product built down to a price. It’s often said that ‘knowledge is power’, so we use our knowledge to build the absolute best instrument for the price, for the benefit of the consumer and the seller.”

Drumm says that with nearly 500 ‘Vintage Plus’ dealers in the UK and Ireland, the formula is clearly working.

“We support those dealers and the Vintage brand with extensive consumer press advertising, a very effective PR machine, a great online presence, strong in-store point of sale material, good catalogues, a strong endorser roster and a full-time demo guy, who does dozens of free clinics a year, all to help our dealers sell more Vintage product.”

Vintage isn’t JHS’s only success with own brands, Drumm says, pointing to the introduction of Wilkinson’s Fret-King brand: “One of the most interesting things we’ve done of late has been the co-operation with Trev Wilkinson, to significantly sharpen up the Encore electric range. It’s great working with Trev and his magic wand, plus our determination to produce the best entry-level guitar in the market – not just the cheapest – has created musical instruments which elicit a response of pure disbelief from guitar players, at how something so inexpensive can be so good.

“Trev’s often said, and I agree, that it’s a piece of cake to make a great guitar for two or three thousand pounds, but to make an instrument that’s a great guitar in its own right for a hundred quid or so is a real challenge worth taking on, to which we’ve risen and succeeded ”

It’s not always simple, of course, to translate that into sales. “It’s taking a little longer to convince some of our trade customers,” Drumm admits, just a little ruefully. “But I challenge any dealer to pick up an Encore E6, keep any prejudices they might have well under control, and make a balanced assessment. The result will be the same: astonishment at how good the product is. We make them this good because we can, we should, and those first-time guitarists deserve the best the industry can give them.”

As any reader who has struggled with an unplayable guitar in the past (in other words, anyone over 40) will tell you, this is good – not to say long overdue – news.

But it isn’t all relentless struggle in Leeds, Drumm says: “Possibly the most fun we’ve had in the history of the company though, is with SpongeBob SquarePants Real Musical Instruments.

Nickelodeon, the owner of SpongeBob, is terrific to work with, the brand is, well, outrageous, with so many possibilities and we’ve now grown it from the original two products, rushed out for the 2007 Christmas season, to an exciting range that includes the new full-size electric and acoustic outfits, to picks, ukes, drum kits, and the super SpongeBob Facelifts.

“So many licensed goods in many sectors concentrate on brand and price and let quality suffer, because they think the power of the licensed property concerned will cover a multitude of sins. As the licensee for SpongeBob SquarePants Real Musical Instruments, we can take the same approach as we do with all our proprietary brands. These are musical instruments, they’re going to be played, they need to be right, and they are.”

But the effort JHS has been putting into its own brands hasn’t meant any slackening of interest in its distributed lines. Given how they tend to shift around these days, has Drumm never felt tempted to step back from the merry-go-round of distributed brands?

“Not at all – and a healthy balance of proprietary and distributed brands is a very important part of our strategy. In 2008 we took on Fishman, the world’s number one transducer brand, teamed up with it to load Fishman into our entire Vintage acoustic line, and helped it launch the awesome Fishman Solo acoustic amp to the UK market. This is the kind of synergy we are looking for with distributed brands. Likewise, when we added Allen & Heath in 2008, synergy played an important part – for us and for Allen & Heath.

“JHS is as opportunistic as the next company and there are brands in the marketplace, which the brand owners, our dealers, and the present distributors all know are ‘under-represented’. It’s up to the brand owners to want, or be driven to a change, and have a view of JHS as a company which can drive their brands forward. My door is always open, we have conversations with companies, we have a wish list, but I’m a realist. If a brand is happy where it is and can’t see the opportunities that everyone else can see, or want to appoint some other company for reasons best known to itself, then who am I to make a fuss? There’s enough to get on with.”

All the same, you don't need a pair of gypsy earrings and a crystal ball to sense that the international MI business is undergoing some major turmoil, at present. How does Dennis Drumm view these developments?

“On a macro level, one can sense the beginnings of potentially seismic shifts, with the global economic turmoil reportedly creating havoc amongst major international players in many sectors, including musical instruments. Companies which have taken on an incredibly high level of financial gearing at the peak of the recently departed ‘good times’ are now struggling to cope with massive commitments, have diminishing revenues, are shedding labour, divesting themselves of liabilities, closing production facilities, and exhibiting clear signs of distress.

“I’d expect to see more brands on the move, maybe the disappearance of some companies, or disappearance of some brands, before we are out of the woods.”

It is in JHS’s interest of course to help retailers survive in these tough times. One thing to consider doing, Drumm says, is to promote like crazy and it is undeniable that few companies in the industry spend as much money advertising and promoting its products as JHS. This is just as true of its participation in exhibitions – JHS just about does them all and then goes that extra mile by organising its very own, which, Drumm says, is a major part of not just its self-promotion, but also its attempt to help retailers.

“Possibly the most important occasion in the entire JHS calendar, from a show perspective, is our JHS Event, with 2009 being the 13th year of a trade occasion which has become a fixture in the calendar, and a fundamental contributor to the business success of many of our customers.

“At the JHS Event, the hundreds of dealers who join us enjoy our hospitality, and cement their relationships with the people at JHS they deal with on a daily basis. Visitors have an exclusive first look at a host of new products, have the benefit of some very advantageous promotional pricing, have offers and deals exclusive to JHS Event visitors and, of course, our now traditional and very generous interest-free, six-month financing on all JHS Event business, which enables many to get through the summer months with a terrific range of hot, new, profitable products, helping them to keep their businesses well stocked and even more vibrant.

“I have to be honest and say that sometimes we struggle to understand why more customers don’t take advantage of what is, quite simply, the best deal in the trade, but at least those who do attend JHS Event go away with a distinct competitive advantage.”

Drumm concludes by talking about perception and the future: “Overall, we want JHS to be seen as a company which is easy to do business with – fun even – and although I might have been company trumpet-blowing a little, we have a clear understanding of our mission, which is to serve our customers and provide, on time, every time, well designed, well specified, well priced, well marketed, in demand products, which bring our customers profit.

“Personally, I count myself very lucky to have joined this company in 1980 and to have been given the opportunity to contribute to its growth and direction. I’m also exceptionally lucky to have a terrific family to keep my feet on the ground. My wife Linda is a director and part of the Skewes family, so she understands the demands of the job. JHS is a team – 90 people in all – that works diligently to make everything seem easy, seamless and efficient to our customers.”