‘We’re sitting at the very pinnacle of the hi-fi business’
When Silicon Valley start-up EVA Automation acquired 50-year-old, iconic British audio brand Bowers and Wilkins in 2016, it was a surprising move, but, as general manager Peter May tells Sean Hannam, it’s a marriage made in heaven…
Before Peter May joined Bowers and Wilkins (B&W) in January 2016, he made a list of brands that he’d like to work for – B&W was at the top…
“Part of the attraction was the brand itself – I first saw it in John Lewis when the Zeppelin [speaker dock] launched all those years ago [2008] – it was an iconic product,” he tells ERT, sat in the British audio company’s HQ, in Worthing, West Sussex.
“It just so happened that there was a vacancy for a general manager in the UK business – and here I am.”
B&W celebrated its 50th birthday in the year Mr May started as general manager, UK sales – the company was founded in 1966 by John Bowers. Prior to its formation, as B&W Electronics, Mr Bowers had assembled speaker systems for local clients in Worthing, in the back of the electrical store that he ran with his friend, Roy Wilkins.
Since then, B&W has become a global business, but it hasn’t forgotten its British hi-roots – it still manufactures some of its speakers, predominantly the top-end 800 Series, at its 48,000 square foot plant in Worthing, which employs 170 staff on the factory floor. However in May 2016, in a shock move, it was bought by Californian business EVA Automation – a two-year old Silicon Valley start-up.
Says Mr May: “When I started here, a Canadian guy called Joe Atkins owned us. We were a traditional, well-established hi-fi company at the premium end of the market, but with some headphones and what we call our ‘new media’ products, like the Zeppelin and the T7 [wireless speaker] bolted on. Then EVA Automation came along…”
Q: The takeover of B&W by EVA Automation surprised a lot of people, didn’t it?
Peter May: It was the right time for us. They’re a company that specialises in user experience, but they didn’t have hardware to put their software into.
They were born out of frustration of using products in the market that weren’t intuitive – they thought they could do it better. If you look at the hi-fi industry, there are a lot of brands whose list of ‘tech spec’ is longer than their list of consumer benefits.
They [EVA Automation] are focused on how we make it easier for the customer to use a B&W product – to make it intuitive and simple.
There was a marriage made in heaven – we have the manufacturing capability and they came along with their knowledge of user experience. The past 18 months to two years have been very different from the previous 50 years.
Q: What’s changed?
PM: There’s a faster pace and a massive investment in people and resources – that was our Achilles heel for a number of years. We couldn’t make the rapid changes that we wanted to because there was a limit on the money that Joe could invest in the business. If you look at what’s happened at our research facility in Steyning [West Sussex], we’ve invested in so many people that we’ve outgrown the place. There’s now a desire to move it to somewhere that’s a bit more appropriate.
Equally, we’ve invested in people in California, where EVA’s based. We’ve got a strong finance and marketing base there.
The great thing is that the guys who run the EVA business are B&W fans – [EVA Automation founder] Gideon Yu’s house has become a B&W emporium. You can imagine the sort of kit that’s in there.
They didn’t buy the brand to change it. The 50 years of heritage that we had is why they invested in us. I’m sure there were other brands on the market that they could’ve bought, but we were credible, we’re leaders in our field and we’ve got a great heritage and reputation – we’re sitting at the very pinnacle of the hi-fi business. They came along with money and resources, a desire to grow the business and a mind-set that says, ‘don’t change what isn’t broken’. We still do extremely well in hi-fi and will continue to do so, because they’ve made it very clear that we’re still going to be ‘B&W – the hi-fi brand’, but there will be other things that will be bolted on in the future.
Q: What are the first fruits of the collaboration between EVA Automation and B&W?
PM: The PX noise-cancelling Bluetooth headphones that came out in September last year – they’ve won all sorts of awards.
The user experience is built around how you would use headphones – it knows when you’re ordering a gin and tonic on a plane and it stops the music, and it knows when the headphones are around your neck, so it stops playing. It also knows when you put the headphones down at night and when you want to start playing music in the morning – all of that is built around how a consumer uses a pair of headphones. That’s our first venture [with EVA Automation] – there will be an awful lot more to come, but I can’t tell you what.
Q: How’s the retail market?
PM: We’re getting more than our fair share of business. It’s not easy – the traditional hi-fi market is relatively flat, but once you start to broaden into other audio solutions, the audio market is quite buoyant.
We have three sides to our business – traditional hi-fi retail, new media and custom installation (CI).
We’re roughly 60 per cent core hi-fi, 15 to 20 per cent on CI and the rest is new media. Independents are the majority of our business – most of those are hi-fi specialists. You will get some stores that have a smattering of TV and home-entertainment products, but very few of the people we deal with are CE generalists, if any at all – they’re all specialists in their field and very knowledgeable.
They understand the products they’re selling and they have demonstration facilities. It’s no secret that we’re quite careful about who we pick as retail partners – we want customers to have a proper B&W experience.
Q: Are you looking for new dealers?
PM: We are – if you look at the geography of our dealer base, there are gaps. We’d always entertain a conversation with good-quality retailers.
It’s very easy to invest in the national accounts, like John Lewis, Amazon and Dixons – in the past five to 10 years, we’ve probably not really focused on core hi-fi dealers as much as we should. There are a number of things we’re doing to try to generate more business with them – give them support in-store and drive people through their doors.
If you look at our traditional, core hi-fi retailers, the savvy ones have recognised that just opening the door on a Monday morning and hoping that people walk in is not enough – there’s an ever-growing trend of what I call ‘hybrids’ – the guys who’ve got a retail store, but they also have the CI side of their business out the back. There are a number of retailers who’ve made such a transition to CI and it has now become their dominant channel.
In the UK, CI is a growing market – thankfully we have a lot of customers who like the idea of having a cinema in their mansion. That side of the business is tough and challenging – there are a lot of brands working in that space.
Headphones has grown dramatically for us – our business has doubled from where we were 12 to 18 months ago. That’s largely because of John Lewis – we’ve had a big investment in them and Amazon.
We also have a space in Dixons Travel at Heathrow T5. The [headphone] market is moving up in its average price – wireless and noise-cancelling have driven that – the PX was well timed and we had a huge marketing campaign behind it. Having had that success, the pressure is now on to come up with the next greatest and latest headphone – there’s work going on in California with our team out there. Headphones will be a category in which we invest heavily in the future.
Our guys who work in Steyning on the 800 Series speakers are the same guys that make sure the headphones are producing ‘the Bowers and Wilkins sound’.
EVA has strengthened that team – they’ve invested in people to try and accelerate some of the programmes. The headphones are manufactured in China at our own factory – everything’s built to our design.
Q: How do you see the B&W brand developing?
PM: Watch this space. Gideon’s intention – he announced it when EVA bought the company – is to make B&W into a major AV company. We know the ‘A’ bit, but the ‘V’ is quite an interesting statement. We’ll see what that translates into.
If you look five to 10 years down the line, B&W will be a much bigger company and a very different company – still with hi-fi, great audio and great sound quality as its core message – but we might be doing other things.
There’s clearly a lot of work going on behind the scenes and there are some big investments in product suites that might be coming along in the future. Our owners have made it very clear that, whatever might happen that’s non-traditional B&W, there will still be investment in hi-fi.
If you did a survey of people who’ve bought a Zeppelin, would they know what else we do? I doubt it. One of the big challenges the hi-fi industry has is: how do you get new people into it? It’s a challenge across all the categories that independent retailers work in, but in hi-fi it’s even more so, because ‘hi-fi’ is what your dad used to listen to.
The industry – manufacturers and retailers – has to find a way of spreading this message beyond its core customers. We’ve got to find ways of bringing new people in.
The Bristol Hi-Fi Show is traditionally a show for 50-plus year-olds. The interesting thing is that this year there was a younger audience, who are going through the same cycle as those [younger] people who bought headphones – if you buy something cheap, it sounds cheap, if you want something better, you buy something better… They realise they can listen to music on other devices that can give them a better experience.
Once you’re into the B&W ecosystem, you’re there forever – it’s very much a family of products that you never want to escape from, because we’re best-in-class at what we do.
