Sutherland MD Gareth Jones tells MI Pro about the firm's range of iconic lines including Hohner, Burns and Crafter....
In the never ending-quest to keep ahead in the teeth of the current recession (or maybe even just to remain in business at all) there seem to be two diametrically opposed approaches to retailing.
One is to stock only the ‘big brand’ products which are more or less guaranteed to sell; the other being to look for the better margins on ‘lesser’ brands. The downside of the first approach is that you end up selling on price, with a reduced margin. And the second, well, it’s hard work and could prove disastrous if you pick the wrong products.
As with most things in life, the popular choice is the middle way – stocking some big (price sensitive) brands and balancing them with less obvious brands where the competition may not be so fierce. But where to go for those slightly left-field brands that still sell?
One obvious choice is Sutherland. The distributor which grew out of the former Hohner UK, still represents that august German company, but which has also gathered to itself a collection of genuinely interesting and well respected alternative lines, like the internationally regarded Crafter, the UK’s very own Burns (in its latest incarnation receiving plenty of review accolades in the consumer press), Sonor, Bosphorus cymbals and a good handful more of well regarded products that tend to sit outside the mainstream.
Sutherland, you get the strong sense as you ask around the trade, is one of those distributors that retailers like doing business with, which must gladden the heart of Gareth Jones, the company’s MD, who refreshingly admits what some others are reluctant to – that he is currently struggling to keep prices down, as he has been doing for the past few years, in the face of a series of major increases from suppliers. Indeed, his success at doing this is probably one of the reasons why Sutherland is so liked.
“I’ve been in business for a hell of a long while now – not just in the music industry – and it’s never been as hard as it is now,” he admits, somewhat wearily. On the day we spoke, sterling had just suffered an unexpected fall. By the time this interview is published it may well have been reversed, but it’s that very volatility that is making life so difficult for every distributor in the UK. That and, as Jones says, the relentless pressure on prices.
“We’re seeing horrendous price increases from all our major manufacturers and that comes at the end of the fourth year of what has been a very difficult trading period that began when Lehman Brothers collapsed. Sutherland has tried very hard over the past two years not to pass price increases on to the dealers and I think we’ve been very successful at that. Last year we even managed to absorb most of the two and a half per cent VAT rise – not on all, but on most products.
“Manufacturers may feel they have carte blanche to impose whatever price rises they want, but we understand how difficult it is for the retailer, so we’ve been absorbing them. To do that, Sutherland has changed its business model to get more efficient and effective at what we do. We’ve tried to take costs out of every process. As a result of that we’ve remained profitable and we haven’t passed on these big price rises. But I don’t think we’ll be able to absorb them in this coming year, because we’re seeing anything from five to 20 per cent rises – so I think we may have to adjust our prices, but modestly.”
There is good news, though. The worst of the price increases are coming from China and one of Sutherland’s most respected and popular lines, Crafter, hails from Korea, where there is now a free trade agreement in place which, Jones believes, means he will be able to hold Crafter prices this year.
It’s tempting to say that Crafter is the jewel in Sutherland’s crown, but the more you look at the line-up, the more you realise there are a lot of jewels to choose from.
And Sutherland is still adding brands, though cautiously, as ever. The most recent is Lewitt microphones – perhaps an unusual choice, but one Jones and his team researched thoroughly, he says.
“Initially we were very wary. The market is dominated by Shure, AKG and so on, but when we looked at it, we were very impressed with the overall promotion of the product as well as the quality. We’re all taking about costs and making a margin, well, with Lewitt we can offer the dealer a profit. It’s been well received so far and we’ve a series of marketing events to promote it this year, and we’ve had successes like Adele’s drummer using a Lewitt bass drum mic on tour, so there’s lots of ‘noise’ about the brand at the moment.
“Another new product that we’ve taken on is Cordiale cables. We took that on in December and it’s an excellent product – high quality German cables that haven’t penetrated the UK market very well in the past. Again, we were cautious, but we’ve been very pleased by the reception, as well as the number of repeat orders that we’ve been getting already.”
And then, of course, there is the apparently insatiable British appetite for ukuleles, which shows no signs of abating and which has been a major source of success for Sutherland since the boom began some years ago. Jones says that, while he has no idea when the boom will fade, he does think the initial surge is over and that what he is seeing now is a trading-up process, where people who started with a cheap beginner’s instrument are now moving on to more serious ukes – of which Sutherland has more than a few.
Moreover, the acquisition of the Aquilla strings brand has reinforced the perception that Sutherland isn’t A.N. Other distributor cashing on a particular trend, but has an interest and a depth in the ukulele market, from the bottom to the top.
Hohner, from which the firm originates, is still a big brand for Sutherland. “Hohner products generally are doing really well,” Jones says. “In fact we are going to be promoting them more this coming year. Everybody should be selling their harmonicas – steady sellers, still the number one iconic brand and Hohner have undergone some major management changes in Germany in the past few years and have become very pro-active. For example we’re about to launch the John Lennon Hohner harmonica, which is a big coup for Hohner, having negotiated the rights for it with Yoko Ono. It was announced at NAMM, will be featured at Frankfurt, and already we’ve taken heaps of orders for it. But across the range Hohner has been working hard.
“I think dealers get on well with our products because they know they can sell them – they’re robust products in the marketplace. We’ve tended to move away from commodity products and concentrated on brands, so I think the entire dynamic has changed within Sutherland over the past couple of years.
“We are acutely aware that we exist because the dealers exist and at every step through the process we try to ensure that we deliver as good a service to them as we can, for example not selling products into arenas that will compete with them and generally trying to make it as easy and as profitable for them as we can.”