Despite bleeding losses globally, and demand for their premium audio products down 90%, Vox Internationals local Premium Audio Products subsidiary, has started a price war in Australia, in what appears to be a desperate effort to shift products ahead of the end of the Australian financial year, and some dealers are not happy about the race to the bottom.
Driven by Peter Shamoon the head of sales, PAP is selling Onkyo and Pioneer receivers, at what has been described as “ridiculous prices” at one retailer a Pioneer VSX-LX505 9.2 Channel AV receiver has been reduced by $700 to $2,099.
Also being discounted out are Onkyo receivers and Klipsch speakers.
Currently targeting Denon and Marantz resellers PMA are next week tipped to launch a promotional marketing campaign targeting Yamaha dealers according to retailers who have been told of the move.
The Company also appears to be selling direct to dealers despite recently appointing Westan as their distributor.
Two Melbourne based specialist retailers have told ChannelNews that Shamoon had cut deals directly with them for supply and not via Snap One or Westan.
This week Shares of Vox International fell 16% after the business announced a loss in its fiscal fourth quarter.
The distributor of automotive and consumer technologies posted a loss for the last quarter of A$28.3 million, compared with a profit of A4.21 million in the prior quarter.
Gross margin on their consumer electronics products fell 25.3% compared to 29.8%. Sonos is achieving gross margins of over 43%.
The Company claims this was primarily driven by higher supply chain costs and surcharges, lower sales of premium home theater speaker products and, an increase in sales to discount channel customers.
In Australia management have not said why they are initiating a ‘race to the bottom’.
Some dealers have speculated that the business is overstocked and want to shift stock “At any price”.
One dealer said, ” Pioneer and Onkyo picked up sales from Yamaha because they did not have stock during COVID, but Yamaha is a trusted brand who now have stock and dealers are moving back to the Yamaha product over Onkyo and Pioneer because they have dealt with them for many years”.
During the last quarter Premium Audio Products was hit hard by the slowdown in demand with sales falling A$44.30 million in the quarter. Overall sales came in at A99.96 million.
Vox International consumer segment, sales declined by approximately 27%, and approximately 90% was in premium audio.
During a conference call management said that while the economy is soft, retailers are buying differently based on excess inventory levels.
This they claim has had had a big impact on sales as premium home theater systems crashed.
Ironically offsetting this decline was an increase in sales of Onkyo and Pioneer products, with local management failing to explain why they need to lose more margin by discounting out Pioneer and Onkyo products in Australia.
Management claims that lower segment sales were primarily attributable to lower US sales of premium home theater speakers, wireless speakers and mobility products, as well as lower sales internationally.
due to weaker markets compared to the prior year.
“From inflation, fears of recessions across the globe, the retail environment and ongoing supply chain constraints, we faced a myriad of roadblocks this year and our results came in lower than expected,” Chief Executive Pat Lavelle said.
Pat Lavelle, Chief Executive Officer said the company expects “continued softness in the global economy and at retail,” and will look to “continue lowering its expenses.”
