PSNEurope can exclusively reveal that CUK Audio MD Stuart Thomson has spearheaded a management buyout of the company, alongside general manager Stuart Cunningham and sales director Simon Druce, to take the distribution specialist to the next stage of its evolution. Daniel Gumble spoke to the trio to find out what this landmark deal means for the firm...
“I suppose it was my fault I got us into all this,” laughs CUK Audio managing director Stuart Thomson, as we begin our conversation about what is unquestionably one of the most crucial – let’s be honest, the most crucial – acquisitions in the distribution specialist’s illustrious 12-year history. Of course, we’re not talking about a run of the mill brand acquisition here, but the outright purchase of the company itself by Thomson and his cohorts Stuart Cunningham (general manager) and Simon Druce (sales director). The trio have just completed a management buyout of CUK that sees them take full ownership of the business, as they bid to attain a more autonomous, nimble footing in the market, which, they say, will enable them to grow the company in a fashion that fits their collective vision. And it really is a collective vision. The three have been colleagues but, most importantly, friends for a great many years. Between them, they have amassed a wealth of experience across the fields of pro audio manufacturing, sales and distribution – all contributing to a holistic approach that has paid dividends from day one, when the company launched with just one brand on its roster.
Today it represents some 23 brands, many of which have been cherry picked in its bid to assemble a fully complementary portfolio. Now, following a year’s worth of restructuring and recruitment, which has lead to the creation of four distinct sales channels – MI and retail, live sound, AV and conferencing and commercial installation – Thomson and co insist that the time is right to ramp up its presence in the market. Here, Thomson, Cunningham and Druce give us an exclusive insight into what the buyout means for CUK and what their plans for the company are for the months and years ahead…
Starting at the beginning, how has CUK progressed to this point from its humble origins as a one-brand supplier when it launched in 2005?
Stuart Thomson: In 2005 we started Community UK Ltd. At the time I was looking after international sales for Community Professional loudspeakers, and in revamping Community’s business in Europe, Middle East and Africa, it was quickly discovered that the UK was a problem [with the existing distributor]. It was deemed that the best way to develop Community’s business in the UK was to start a distribution company, which I did with Christine Howze, who was one of the owners of Community at the time. So, while it started as a solution for one brand, it was never what I had in mind for the long term. We always wanted to build a multi-brand distribution company; we wanted to take brands that hadn’t reached their potential or hadn’t been present in the UK market. A year after we launched we had grown our portfolio to five brands, and in 2006 we rebranded the company to CUK Audio.
Was 2005 a difficult time to launch the company, what with the recession in 2008?
ST: It was a bit of an inconvenience! We were quite lucky in the sense that, because of everybody’s background in the company, and because we had developed a product portfolio, we were already becoming a solutions provider. Don’t get me wrong, it was tough, but we continued to grow through that period. And the reason we did that was because, prior to the crash, there were companies who just installed bars and nightclubs, or just did churches. When the world fell off an economic cliff, all of that changed and everyone was taking whatever work they could. As a result, you were getting AV companies who had no idea how to do the staging, but they knew that we did. So by being more than just a provider of products, we became a trusted advisor, simply because we were more than just somewhere to buy loudspeakers.
We always wanted to build a multi-brand distribution company; we wanted to take brands that hadn’t reached their potential yet
So what lead to the buyout? How long had you been thinking about it?
ST: There was always a plan to bring other people into the business. It’s great to have a vision, and as the business diversifies you need a team of people around you who can act as a sense check. Stuart Cunningham is more technical than I and, dare I say it, a little more cautious. A few years ago we worked out that myself, Stu and Simon together had all the knowledge and skills to give the company the best opportunities for moving forward. We needed an ownership and director team that shared the vision of sensibly developing the brand portfolio and the continued diversification of the company.
Tells us about the restructure of the company and how it has impacted the business.
Stuart Cunningham: About a year ago we decided to restructure how we did everything, and that’s based around four distinct market sectors – MI and retail, live sound, AV and conferencing, and some general commercial installation. One year on, we have now built our sales team and our website around that. Previously, our sales team were selling anything to everyone, but now we have sales leaders who are more specialist in particular areas, who have an understanding of particular products and applications and they are tasked with growing those parts of the market.
Do any of those sectors need more attention than others?
ST: Not really, no. At the moment, because of our background and our history, we are pretty strong when it comes to install sound, AV and conference. The MI retail and live sound channels are getting the investment they need to develop. As much as margins are squeezed in retail – and while you’ve the giant online German retailers causing pricing issues all the time – there are still significant areas of growth to be had, both with the brands we have and the brands we are looking at. The same is true for the live sound side of the business.
Has the restructure made a tangible impact upon the company yet?
ST: One of the biggest challenges is that, as you grow, you diversify, and the way you present yourself has to change. If you try to continue like, We are CUK and here are our 23 brands, all people see is loads of brands and loads of products; it looks complicated and you look like you don’t understand their business. But we do. And we have the right people with the right knowledge, not just of the things that we sell, but also in our various areas of business and with competitors’ products and applications. The idea of the restructure was that we maintain that connection with our customers. We can’t forget what got us through the recession, which was being relevant, understanding people’s business and being able to help them. It wasn’t about having a product at the right price or offering them a bigger margin or bigger discounts.
How much of a difference will this buyout make to the rest of your staff?
ST: It’s easier to manage and motivate because everyone becomes self-motivated. With all due respect, with some companies, everyone has been told exactly what they have to do and how to do it every day of their lives. For that person to then have the freedom to put their own style on their work, and to be able to work with the owners of the company to bring products to the market is really refreshing for them. That in itself motivates them.
Read the full future in the October issue of PSNEurope. You can subscribe here.
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