To say that the past 12 or so months have seen a lot of changes for KMC Music could be safely qualified an understatement: In January of 2015, the organization (still at the time a subsidiary of FMIC) sold all of its percussion brands, as well as Ovation Guitars, to Drum Workshop; Just one month later, FMIC completed an asset sale of the KMC Music wholesale distribution business and proprietary brands to JAM Industries, Ltd.; early June saw the opening of a new KMC headquarters in Connecticut and relocation of warehousing and distribution to Mississippi; later that same month KMC became the U.S. distributor for Supro amps; July saw KMC being named sole U.S. distributor for Paiste America; and this fall, the organization was named the American distributor for Rhythm Tech after JAM Industries acquired the brand.
And that’s really only scratching the surface.
Like I say – a busy year.
Recently MMR sat down with JAM US Music Group CEO/KMC Music president, Mark Terry, to chat about all of the developments of the past year, as well as his expectations for the coming months.
2015 has been nothing short of dramatic over at KMC Music. Can you discuss what’s been going on?
Mark Terry: We’re rewriting all the rules that need to be re-written for us to serve as the 21st Century’s leading full-service MI and pro audio distribution company. That’s what’s going on at KMC Music in a nutshell – and the effort encompasses just about every aspect of what we do. Since being acquired by JAM Industries, by far North America’s largest MI and pro audio distribution company, we now have the resources and commitment needed to add more products to our portfolio, more sales professionals to our field and call center teams, new MIS and order processing systems, and a new automated warehouse distribution center that is going to greatly accelerate ‘just in time’ delivery of products to our customers.
What’s the primary catalyst for all of these changes?
Technology and the resulting demands and expectations of consumers. Let’s face it, our customers’ customers now have more choice in all product categories than ever before – and that’s a good thing. It means the industry is succeeding while it changes. However, consumers have been conditioned to get what they want when they want it. They don’t want their choices to be limited by what is only available in the store. They do their research online and then expect to see that product in the store. Since retailers can’t keep every possible SKU in stock they need to rely, more than ever, on a large strong wholesale distributor. When a customer comes in and has seen something on the Internet, the dealer needs to be able to get that item for the customer in 24-48 hours. It’s a hybrid business model that is emerging in the retail MI space and it offers the potential to be a very healthy one for manufacturers, retailers, and customers – but the driver that makes this model work is the distributor that can deliver the most number of solutions in every product category in the fastest amount of time. That’s our goal and our promise to dealers – to be the biggest, best, and fastest solutions provider in the business. And we’re doing it.
Can you go into more detail?
Sure. Since March of this year, at KMC we have added at least eighteen new brands to our portfolio, including Paiste, Supro, Rhythm Tech, Keeley Pedals, Mono Bags, Mooer Pedals, Pigtronix Pedals, RCF professional audio products, Suzuki Harmonicas, Latin Percussion, Toca, and Gibraltar. We expanded our field sales force by appointing three new regional sales managers in the Southeast, West/Northwest, and Mid-Atlantic regions.
What’s the long-term vision for the JAM U.S. Music Group?
KMC Music is now the primary distribution company in the United States for many of the brands previously distributed by U.S. Music. For our dealers, it’s going to mean immediate access to a broader range of industry-leading brands that are backed by KMC’s legendary customer support. U.S. Music will serve as a developer of brands, leaving the sales and distribution to KMC Music and Davitt & Hanser.
U.S. Music has done an outstanding job of developing and managing our own proprietary brands such as Washburn, Randall, Oscar Schmidt, Jay Turser, and others. They will continue that focus as well as take on the management of brands that we own in KMC like Barcus Berry, Jasmine, Hilo, MBT, and others. They will be our center of excellence in brand management and marketing. We will be investing heavily in this area. Additionally they will handle international sales for those products and continue focused distribution of a limited number of premier brands like Marshall, Eden, Natal, and Digitech.
KMC Music and Davitt & Hanser will be the centers of excellence for US distribution and dealer support. Each company has a different product mix and customer base. They have operated independently and successfully in the industry for years and will continue to do so. KMC Music will now sell many of U.S. Music’s brands such as Washburn, Randall, and others, alongside Hagstrom, Warwick and the more than 250 other brands they currently carry. As another example Davitt & Hanser will now be selling our Jay Turser brand.
The KMC Music Sales force is taking on quite a lot in a short time – up to the challenge?
Absolutely! KMC Music has over 40 outside and inside sales people that have already been trained to bring these additional products to market through our retail network that now exceeds 6,500 dealers. We have 10 seasoned sales managers to provide additional in-field support all across the country , and we’re not done. Over the next few months you will see us add additional resources to every part of our sales and support teams.
With NAMM on the horizon, what are your expectations for 2016?
Winter NAMM will be a great show for us this year. We will be launching hundreds of new products. In the long term the industry continues to have legs. As long as human beings enjoy making music there will always be an MI business to serve them. That might sound simplistic, but I think we all have to remember that making music is a central part of the human experience. This reality about human nature is what will keep our industry thriving even as it is constantly forced to change. Yes, we as an industry are going to be challenged – and challenged in every part of the business: mix of product, retail structure, and delivery technologies. When you think about it, though, challenge has always been a big part of this business. The key to sustaining success in this business is for retailers to execute strategically and consistently in a number of different initiatives around the music space in their community. The retail MI business is no longer, if it really ever was, a business where retailers could simply hang product on the wall and wait for customers to come into the store to make a purchase. But they’re not alone in this effort. That’s exactly where KMC Music can really become a true partner in the cause. We have the resources, the product mix, the delivery technologies, as well as the training and support that can help our retailers to continue to meet the challenges posed by change.
