New chapter for Peavey in Europe2 December 2014
Peavey Commercial Audio is going through big changes worldwide. In August, Hartley Peavey announced that international operations would be ‘restructured’ and that, as part of this, the facility in the UK would be closed. Price competition throughout the supply chain, emanating especially from China, was at the heart of the rationale, but the unique conditions in the UK provided an obvious route to costcutting at a site that “hasn’t been needed for some time” in its original form.
As this affects Europe, there’s a ring of truth to the old cliché about there being no problems – only opportunities. The UK centre had grown with the company’s extraordinary success in MI and sound reinforcement, providing key manufacturing capacity as the brand spread outwards from the US. Later, with the arrival of the MediaMatrix platform, a high end pro-audio and installation dimension prospered and Peavey Commercial Audio became a recognized entity parallel with Peavey Electronics. Both arms pioneered direct sales models in certain territories, making the UK also a pivotal distribution hub for the EMEA region.
Now, though, the building is shutting down. Sporting a workaday hi-vis jacket as he prepares every last nut and bolt for an epic auction this month, operations manager James Kennedy is sanguine about the changes while looking forward to taking up residence in a new – smaller – facility very nearby. Most importantly, this new building is solely dedicated to the Commercial Audio markets he has helped to build…
“The old place has slowly lost relevance, sad to say,” Kennedy explains. “When there was manufacturing here it made a real contribution to the portfolio, and was sustainable as a P&L centre. We made Trace Elliott amps, Peavey speakers, mics, cables… all of which transferred to China and the US. After that, we found it difficult as a distribution unit too: as the markets became more and more competitive, we were adding a cost layer that was harder to justify. There was value added: when people like VV & Sons in Dubai, Lexon in Spain or Algam in France bought from Peavey in the UK, they had the benefits of shipping and support from here. But the logistics were costly.”
Essentially, the new operation has removed ‘shipping’ but retained ‘support’, Kennedy continues. “Yes, the distributors now have to source the kit from further away, but it is now at a reduced price. We had to land it here and add a margin, as a P&L business. Now, we can focus entirely on the kind of technical after-sales support that is becoming so important in systems integration.”
The focus is also undiluted by those parts of the catalogue that Kennedy and his team may have enjoyed strumming during coffee breaks, but which don’t deliver mission-critical audio around a stadium. “It was nice to have that association with rock and roll, if you like,” smiles Kennedy, referring to the guitars, drums and amplifiers that glammed up the Corby warehouse for so many decades, “but the industry has changed. The musical instrument support mechanisms have moved on too, and what you now see as Peavey Commercial Audio in Corby, UK is 100% a pro-audio and installation business.”
For much of the network in Europe, and beyond, the actual business model changes little. There were only two direct markets – Germany and UK – and, for these, there are now returns to independent distribution along traditional lines that many will find reassuring, even comforting. The sales drive remains split between Mark Coombes, handling the UK, the Republic of Ireland, Iberia, France and Scandinavia; Christoph Sesseck, covering Benelux, Germany, Switzerland and Austria; and World Marketing Associates, which continues its unique representation of the brand in Eastern Europe, Russia, Middle and Far East and Africa. And it’s no change at Peavey Italia, which has always squeezed its own accordion as almost a franchised distributor-cum-product developer – and even manufacturer, now making the Peavey HiSys and the Crest CPS powered speakers.
“For us going forward, it’s a very positive move,” reflects Kennedy. “Peavey PA, Crest Audio, MediaMatrix and Architectural Acoustics belong together, and they belong here.”
(Pictured, L-R: Mark Coombes, European sales manager; James Kennedy, operations manager; Andy Hollan, sales coordinator; Lee Freer, application engineer)