home theater speaker: Circuit City Grabs D&M Brands

By Joseph Palenchar -- TWICE, 7/17/2006

New York — D&M's Denon and Boston Acoustics brands are big winners in plans by Circuit City to expand its home entertainment areas.

The two brands will appear nationwide in Circuit City stores and on www.circuitcity.com for the first time beginning in late September in conjunction with the rollout of the chain's revamped home entertainment format, which is planned for more than 500 of the chain's 630 stores. In all stores, D&M's brands will replace two Harman brands — Harman Kardon and Infinity — that have been long-time stalwarts in Circuit City's home audio lineup.


Paul Bente, president of Harman Consumer Group's speaker division, said the Harman-Circuit City parting was “very much mutual.” Harman Kardon has been in Circuit City since 1986, and Infinity has been in since the early 1990s. “Business changes,” he said.

For Boston Acoustics, the Circuit account will complement the brand's strength in the custom installation channel and boost visibility among consumers, said Boston senior sales and marketing VP Phil Cohn. By opening Circuit, Boston will also make up for lost ground when Tweeter stopped selling Boston's speakers, but not tabletop radios, about a year ago. Circuit will be Boston's largest account by store count and will carry the brand's home speakers, home theater speaker packages, custom-install speakers and tabletop radios. Tweeter stopped selling Boston's car audio products in April, but Circuit didn't announce plans to pick up the car line.

For Denon, Circuit's launch of a derivative series of components and systems not available to A/V specialty and custom install dealers “will create more exposure for the brand as a premium brand for people buying advanced flat-panel TVs,” said Denon president Steve Baker.

The distribution coup potentially could propel Denon into the top dollar-share position in audio components, consisting of receivers, amplifiers, and tuners. Denon consistently ranks No. 1 in dollar share in the specialty A/V channel, but among all distribution channels combined, Denon consistently trades places with Sony for the No. 2 and No. 3 spots behind top-ranked Yamaha, according to The NPD Group statistics.

Circuit will get Denon's derivative home theater series of components, consisting of five receivers from $299 to $1,099, three DVD players and changers from $169-$349, a stereo receiver and a carousel CD changer. Circuit will also get home theater in a box (HTiB) systems based on the derivative-series components.

The derivative-series components are also available to TV/appliance dealers and such chains as Fry's, Baker said. Denon's custom series, in contrast, is targeted to A/V specialty dealers, regional A/V chains including PRO Group members, and custom installers. A/V receivers in this series are priced from $329 to $7,000.

“Our intention is to support all of our dealers in the custom and specialty channel,” Baker added.

Interestingly enough, Denon and Boston Acoustics will continue to sell products through Circuit's rival Best Buy and through Best Buy's Magnolia Home Theater stores. Boston Acoustics sells its Recepter table radios through Best Buy stores and its speakers through Best Buy's Magnolia stores. Denon sells its derivative-series HTiBs through Best Buy and its installation-series components through Magnolia.

For its part, Circuit called the two brands “a perfect complement” to the chain's home entertainment expansion, described by senior executives as the largest store-remodeling effort in company history. The nationwide retrofits will feature plasma display walls, home theater vignettes and revamped audio demo rooms that are “fully integrated into the home theater experience” and allow for faster A-B comparisons of components. — Additional reporting by Alan Wolf