It's now official. A newly formed company will carry on the business of the Dumoulin and Audiotronic franchises. Réseau Dumoulin Network Inc. is a new legal entity with Hugues Léger as President & CEO. He also retains the title of Vice President of Marketing at Groupe Dumoulin, at least until it is wound up, probably later this month. Réseau Dumoulin Network Inc. has bought the intangible assets of Groupe Dumoulin, the principal one being the names and trademarks.
Management of Réseau Dumoulin Network Inc. is comprised of what it terms "selected members of Groupe Dumoulin's former management." This company is itself owned by two new numbered companies registered in the Province of Quebec. One is owned by management, and holds 49% of the shares of Réseau Dumoulin Network Inc. The other, holding 51% of the shares, is owned by franchisees. Currently, there are 61 storefronts in the franchise-only operation: 33 Dumoulin franchisee partners have 35 stores, and 23 Audiotronic franchisees have 26 stores. Of the former, 26 have invested in the shares of the company, as have 11 of the latter.
In addition to Léger, the new management team includes Jacques Dumoulin, currently President and CEO of Groupe Dumoulin, who is Director of IT & Finance. New to the operation, as reported here in earlier stories, is Michel Plante as Director of Operations & Product Planning. He also remains, according to Léger, President of Son et Image. Francois Lemieux reunites with Léger and Dumoulin as Director of Brand Experience, Training, & Communications. Bruno Anania is the Marketing Manager for the company, which numbers about 15 people. Some other former Groupe Dumoulin employees have been rehired.
Until the fall, according to Léger, the new company will work out of Groupe Dumoulin's current headquarters at 2130 Boulevard Dagenais W. in Laval, QC. That location has become too large for Groupe Dumoulin since the company commenced downsizing immediately upon entering CCAA (Companies' Creditors Arrangements Act) protection last February 23, when it had about 35 head office staff and approximately 350 in total, including staff in a number of corporate retail stores. The building, owned by the Dumoulin family, is likely to be sold.
Léger, and Lemieux, after a full day of meetings and negotiations with Audiotronic franchise partners and lawyers at the Toronto Airport Hilton, hurried downtown during yesterday's evening rush hour to talk to Marketnews, before hurrying off to yet another meeting in Toronto. Accompanying them was Audiotronic franchisee, investor, and new member of the Audiotronic Franchise Partner Steering Committee, Roy Williams of Yellowknife, NWT.
While declining, before court documents are publicly posted, to state the actual price which Réseau Dumoulin Network Inc. paid for Groupe Dumoulin's names, trademarks, phone numbers, Websites, and the like, Léger allowed that it was in the ballpark of the $175,000 figure which your correspondent had heard through the rumour mill.
"There was more money," he volunteered, "offered by the franchisees than was necessary to start up the company." Although the deadline had officially passed for franchisees to buy shares, it was being made elastic enough that others could avail themselves of the opportunity in the next day or so. Léger added that other former Audiotronic franchisees who have not joined with Réseau Dumoulin Network Inc. as yet, and have not joined other associations like Groupe Power Group, may still sign on with the new company.
"And we had a brand new retailer express an interest in joining with us."
Williams, who is the largest Audiotronic dealer to have signed on with the new company, rode downtown with Léger and Lemieux to "promote this so that more retailers join with us."
Léger and Lemieux stressed that operations under the new Réseau Dumoulin Network Inc. will be significantly different than those under Groupe Dumoulin. "We have four pillars," said the former, "which will support our model. One is a 360-degree experience for the customers, in four areas: IT, mobility, cameras, and HiFi audio. The other pillars are: service and expertise; proximity to customers, including those in big urban markets; and fun. We think that this industry forgot about fun in its quest to sell boxes and lower prices."
Both he and Lemieux refer often to the success of the Apple stores, and they say that the new look of Dumoulin-Audiotronic stores will be the boutique. Days of 10,000 and 15,000 square-foot stores, as promoted four or five years ago by former Groupe Dumoulin President & CEO Marc Mercier, are gone. While his approach may have been right for the times with burgeoning flat panel sales, their margins have dropped drastically. "Sales per square foot, in our corporate stores," said Lemieux, "dropped from $1,000 to $500 in the last five years."
Léger noted that Apple products are a big catalyst in the market right now, and that price does not enter into it. Groupe Dumoulin had not had Apple as a vendor, but the new company is actively looking at them. "They bring people in to the store," he observed, "and people love to talk about them. There are good margins in the peripherals. There has been too much emphasis on sales of televisions. In the future, the TV will just be part of the home entertainment system which is controlled by IT.
"People will be able to run their systems, and automate their homes without being multi-millionaires, thanks to iPhones and other smartphones.
"We will not be in a price war with big boxes," he concluded. "That war is already lost. The new Dumoulin-Audiotronic stores will be about the brand experience, and about being a place to which the shopper wants to go."