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JAM Acquires Davitt & Hanser

...of premier brands including Ernie Ball, Audio-Technica, D’Addario, Remo, Hohner, Shure, Vic Firth, and numerous others. With the acquisition, JAM, Canada’s leading distribution firm, adds to its U.S. operations, which also include American Music & Sound, distributor of Allen & Heath consoles, Nord keyboards and other pro audio gear, and U.S. Music, which offers Washburn guitars, Parker guitars, and Marshall amplification. Hanser Music Group will now focus on its branded products, including B.C. Rich and Michael Kelly guitars, Kustom amps, and Powerwerks and Dawn pro audio. Gary Hanser, CEO of Hanser Music Group, said, “Our business is growing in several key areas. This transaction gives us an opportunity to focus on and to innovate in those areas. We are excited that after 90 years in the industry, we can continue to improve and refine all of this while working to better partner with our dealers and distributors around the globe.”

JAM CEO Martin Szpiro said that Davitt & Hanser will operate as a stand-alone division at a facility in the greater Cincinnati area, and will be headed by Jay Ensminger, a ten-year veteran of the company. Davitt & Hanser’s sales team and order desk will also continue with the company. “We’re fortunate to be keeping an excellent team that understands the market and the small goods business and enjoy a lot of good will,” said Szpiro.

Over the next 90 days, Davitt & Hanser inventory and order fulfillment operations will be shifted to an existing 200,000-square-foot JAM facility outside of Memphis, Tennessee that also handles order fulfillment for American Music & Sound and U.S. Music. Szpiro said that new inventory racking, conveyor, and order processing systems, specifically designed for small goods, are currently being installed to accommodate the new division.

M.I. accessory distribution is not a new business for JAM Industries; since 1986, its Coast Music division has evolved as Canada’s leading accessory distributor. Szpiro remarked, “We understand this business—the importance of prompt order fulfillment, building a strong B-to-B order platform, and how to efficiently handle a 23-line order that goes into a single FedEx box. It will be pretty easy for us to dovetail our proven supply chain and fulfillment systems into the operation.”

The U.S. distribution business has consolidated over the past decade as a growing number of retailers began buying direct. Nevertheless, Szpiro is undeterred and sees considerable upside for Davitt & Hanser. “A lot of the distributors have focused all their resources on the top ten retailers and the brands that they own,” he explains. “That creates an opportunity for a distributor dedicated to serving the thousands of independent retailers who need accessories. It’s something we’re good at, and we’ve been encouraged by the support we have received from all our vendors.”

Although Davitt & Hanser will operate independently of JAM’s other U.S. business arms, Szpiro says there are opportunities for synergy. “We’re in the process of reviewing the American Music & Sound and U.S. Music portfolios to see if they have products that they should sub-distribute through Davitt & Hanser,” he said.

Founded in 1972, JAM Industries currently employs 600 and had revenues of $285 million in 2012. Founded as the Canadian distributor of Korg keyboards and other high-tech music products, it has enjoyed a four-decade run of unbroken sales growth, driven by adding m.i. product lines and branching out into the consumer and professional audio markets. Today, JAM comprises ten separate divisions including Erikson Music, which distributes Pearl drums; Marshall amps; Washburn guitars; Korg Canada; Coast Music; and operations serving the lighting, consumer audio, and commercial sound sectors. Szpiro attributes much of the company’s success to this disciplined divisional structure. “Our division heads have a single-minded focus on serving well defined markets,” he explained. “They make use of shared distribution back office services, but they have the latitude to do what’s necessary to take care of their customers.”

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