Lenbrook America The Last of the Independents?
Robert A. Brown, president and CEO of Lenbrook America, is very aware that NAD Electronics and PSB Speakers are "quickly becoming two of the last independent brands independently owned and not up for acquisition."
According to Brown, Lenbrook is not looking either to sell the brands or add brands, and has so far declined equity investors—in no small part because, he says, both NAD and PSB are doing so well now thanks to major product development. "Our feeling is that our growth potential is in the multiples, not in the percentages, so we don't have a crying need for it."
Sharon, Mass.-based Lenbrook America is the exclusive U.S. distributor of the NAD and PSB brands, and is owned by its parent company, privately held Lenbrook Industries, based in Pickering, Ontario. Lenbrook Industries distributes NAD and PSB products to Canadian dealers and, through its subsidiaries, to 70 independent distributors around the world.
While Lenbrook Industries distributes numerous third-party brands in Canada, Lenbrook America remains solely focused on NAD and PSB, having sold Aegis Systems in April 2004 to the company that designed the home systems management line.
NAD and PSB have held their course as upper-middle tier brands—"not crazy high-end, not entry level," quips Brown. With independent retailers and custom retailers as its trade base, Lenbrook America's biggest electronics retailer is Harvey Electronics in New York.
About 50 percent of Lenbrook America's dealers sell both brands; its manufacturer representatives sell both brands, except in one market. The brands are represented by distribution companies in areas where Lenbrook doesn't have direct dealers, but Brown says the company positions its third-party distribution as an "incubator program" using pricing ("the pricing is not great") and evaluation of monthly territory reports.
The NAD and PSB engineering departments work 20 feet from each other in Pickering, but Brown says there's very little cross-pollination between brand designs beyond the testing of NAD electronics with PSB speakers. Currently, none of Lenbrook's contract manufacturers produce both brands' products. Lenbrook Hong Kong, comprised of five engineers and a secretary, oversees the off-shore production.