Polk invests $500,000 in Genesis

Television Digest with Consumer Electronics, Jan 5, 1998

Polk's investment in Genesis, Eagle, Colo.-based company controlled by ex-Infinity founder Arnie Nudell and others, is in form of convertible preferred securities and includes 3-year option to buy 100% of Genesis. Polk CEO George Klopfer said investment "cements a closer relationship" between companies, whose "cooperation" on Eosone project has "produced valuable benefits for both companies."

Klopfer said Genesis-brand high-end speakers "have grown at a very satisfying rate in the last year or 2." He said new financing from Polk will "enable them to continue their recent growth." Without elaborating, Klopfer said of future joint projects with Genesis: "We have identified areas of common interest where we may be able to cooperate to our mutual further profit."

As for unrelated move to sell Polk line through Circuit City, Polk Pres. James Herd said company "has watched closely how other companies such as Alpine and Velodyne have handled this distribution transition" from specialty retailers to national chains. As such, he told independents in Dec. 23 letter: "We think that a combination of increased market exposure, highly competitive products, sensible policies, high levels of customer service and increased field sales support will enable all of our business partners to sell our line profitably in larger volumes."

Herd said: "The world is changing and so is electronics retailing. We believe that quality retailers and suppliers of all types will coexist and prosper in the market." He said winners will be "those who refine their value-added formulas" and "work hard to efficiently serve and expand the market."

While acknowledging that decision to sell Circuit City "may cause concern" for some existing Polk specialty retail accounts, Herd said: "We would like to assure you that we value you as a Polk Audio partner and intend to work very hard to continue to earn your respect and your business."