A&B Sounds the Death Knell
It looks like the final nail has been hammered into the A&B Sound coffin. As a consumer I'll miss it, but as a business analyst I'm thinking: Let's hope it stays there.
This retail zombie was a classic story of innovation squandered, really bad M&A, and modern management gone mad.
For years, A&B was the king of music retailing, using innovative thinking to create aggressive pricing regimes, marketing coups such as Boxing Day blowout sales, and forceful turning of traditional music industry mass distribution methodology inside out. At its peak, it was producing $300 million in annual sales, which was a ton back in the day.
But innovation is easily copied, and, as it aged, A&B sat pat on its business model. Eventually it was swamped by competitors with more firepower who out-innovated it.
By the new century, the business was sclerotic and dying. And then along came a medicine aimed at revival – a purchase by a large computer maker. These kind of M&A's happen all the time – bigger company hoping for a turnaround swoops in and takes a chance on a fading business..
But turnarounds depend on knowledge as well as a healthy dose of creativity. There didn't appear to be much in A&B's case. The buyer brought in a squad of managers – theory-heavy MBAs without any experience in music retailing – to implement the turnaround.
Presumably, they ignored industry veterans because they believed the oldsters no longer had the chops.
Bad move. To be effective, theoretical smarts require the leavening power of experience, just as experience needs the fresh, and disturbing, thinking supplied by grads schooled in modern methods.
It's a symbiosis that should be clear to everyone, but rarely is. Instead, you often see eternal, egotistical warring between old and new schools over who's “right.”
When camps compete instead of collaborating, bad things happen. And, sadly, A&B Sound appears to be a case study.
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