A canny policy of acquisition has seen DJ specialist Numark Alesis achieve ten years of low-key, but solid growth, even outperforming the current market slump. Gary Cooper spoke to the firm’s Jon Bickle and Richard Seymour to find out what it’s doing right…
Although Numark Alesis has been a major part of the UK’s music scene for some years, it still seems to have a slight air of mystery about it.
Clearly successful in a number of areas, having refrained from the chest-beating self-promotional style of some, it has been easy to overlook just how much it has grown – despite all the talk of declining markets. We spoke with Jon Bickle, UK sales and marketing manager and Richard Seymour, executive vice president of international operations, to set the record straight.
One of the most significant facts about Numark Alesis (there are other brands involved, but we’ll come to them later) is that unlike many companies in the music industry, it is owned by one man – Jack O’Donnell, whose extensive business interests in Europe it is Richard Seymour’s job to represent.
Why this matters is because Numark acts in an unusually direct, not to say oblique, style, not least in the way it has acquired other companies and brands. On each occasion, the acquisition seemed to appear out of nowhere, led to raised eyebrows, and then, slowly, as the strategy became apparent, began to be seen as a particularly shrewd one. This was the work of one man backing his own judgement – not of a corporate ‘best play it safe’ board of employees.
A case in point was when O’Donnell bought Alesis. Some pundits said Alesis was at the end of its rapid growth curve and that its products were coming to the end of their sell-by dates. But O’Donnell had spotted what the pundits had missed – that Alesis had ploughed vast amounts of money into R&D, endowing it with technology which he could then cascade into his other brands.
The same was true when he bought Akai Pro. And while his latest acquisition, the Chinese audio company Alto, might not have a vast legacy of R&D, it could hardly be better placed to manufacture what O’Donnell’s research teams are continually developing.
Clearly, this strategy is paying off, as Richard Seymour explained, when asked just how big the company’s European operation has become.
“In Europe, we have essentially a direct operation in Germany and another in the UK, with a research and development arm too. To give you an idea of scale, in Germany our warehouse holds 2,800 pallets and in the UK we have 1,800 pallets.
In the UK we have 45 employees and where we really try to set ourselves apart is that we have dedicated telephone support with six full-time employees just supporting end-users, plus a computerised call centre for customer service. We really do try to offer our trade customers and our end-users a premium level of service,” says Seymour.
“I wouldn’t say we were a sleeping giant, but we’ve been getting on doing our work and people haven’t realised the size of the company and how fast we’ve been expanding,” Jon Bickle adds.
Expanding? In this climate? “We’ve had ten years of continuous growth, Seymour says. “Every one of those years has seen double-digit growth and this year will be no exception. Some of our brands are up by 39 per cent this year. In fact the whole company in pro was up by 39 per cent this year.”
The key to success, Seymour says, has been surprisingly simple. “It has been largely down to product development and making sure we’re in step, or ahead of, trends in each portfolio.
For example, we’ve embraced the Apple generation. We have very close cooperation with Apple so, for example, with Alesis we’ve released the I/ODOCK, which is the world’s first direct docking accessory for musicians using the iPad, and for the Numark brand we’re the first DJ company to release an exclusive DJ mixing controller for the iPad, called the iDJ live. So, you can see we really do invest heavily in research and development.
“We are not a business that just goes out to Asia and finds some products to sell domestically. We’re owned by an individual, Jack O’Donnell, whose directive is to push the envelope, take occasional risks on new product and try to produce products that our customers really need and desire.”
ON THE MARGINS
The purchase of Alto, the most recent O’Donnell acquisition, was another of his unexpected moves. How had that been received in the UK?
“The reception we’ve had has really been quite amazing,” Bickle says. “We saw a gap in the market, which needed Numark’s marketing and expertise to create new products and get the name better known. The dealers have seen the product portfolio, the pricing and the margins and we’ve been absolutely staggered by the support.”
Do they see it as a mainstream MI brand? “We have a mixer which is £18.49 trade – eight inputs with phantom power. No matter which music store you are in the country you can afford to buy them and sell them, but we also sell Mini Array systems.”
Perhaps another key to the company’s success lies in another of Bickle’s words – margin. Numark Alesis has an excellent reputation for its dealers being able to retain margins – and in this day and age that makes the company an even surer bet.
Alto, Richard Seymour says, is now getting the full O’Donnell treatment. “Our intention with Alto is to achieve the same level of change and growth as we have done with all our acquisitions. For example, we’ve turned Akai Pro from a sampler company into a broad range, high-end studio controller business.
Alesis is now a leader in e-percussion, so you will see the Alto product portfolio broaden and embrace current technology, starting at Winter NAMM with some never-seen-before sound reinforcement products that will really set Alto apart from the competition.”
There may be readers who still regard Numark Alesis as primarily offering products to market sectors outside the strict MI sector – DJ and Pro Audio, being the obvious examples. But times change and this is one company that is not just part of change, but actively promoting it. Asked what he thought Numark Alesis can offer the average MI dealer, Jon Bickle is quite clear – not least in the advantages of having in stock what dealers actually need.
“We offer very good margins, unique products and we’re not frightened of holding stock. We take risks every day of our lives, but we roll the dice and we believe we get it right more often than we get it wrong. So the vast majority of stock we’re happy to hold, because we’re a proper distributor – and that’s where a third party distributor may not have that luxury. We also look for the long-term relationship with our retailers.”
So where does the Numark Alesis family go from here?
“On a global scale we’re currently discussing three acquisitions and for the UK operation, we’re looking to double in size within the next three years,” Richard Seymour reveals. “The deals we’re scoping out at the moment are companies that have great synergy with what we’re doing now in the music and related fields – the brands would all be applicable to the majority of our customer database. We’re a privately owned business and that does give us great opportunities. We’re not owned by venture capitalists, we’re not owned by a bank and the future is very exciting.”
“Retailers have got some very hard decisions to make in these times,” Bickle adds. “They have to work out the pros and cons of each distributor. I’d say have a look at our portfolio, have a look at our pricing, have a look at our backup and how we operate. I’d say we are a good horse to back. 39 per cent growth last year was only achieved because we have innovative products, good backup and strive to provide a quality service to the industry.”
Sales: 01252 341400