Interviews

Ken Kessler met with Julian Vereker late last Summer and, among other things, asked him to what extent the parting of the ways with Linn had instigated the setting-up of their own US operation.—John Atkinson

Julian Vereker: It was certainly a catalyst. I wouldn't say we had it in mind to change distributors, because once you make a commitment to support a distributor, part of their livelihood depends on that. The last thing any responsible manufacturer should do is to pull out, especially after 10 years. It wouldn't have ever come as our suggestion. However, the sales people at Audiophile Systems clearly found it difficult dealing with what they perceived to be two competitive lines. So, very amicably, Audiophile suggested that we find an alternative distributor.

We did, in fact, have a look at several of the alternatives, but—being realistic about it—with the sort of operation that we feel that it's necessary to do in the States, there wouldn't have been enough money for another distributor to take on our line and deal with it as a sole line without having competing products. There are difficulties from the financial point of view—I don't think anybody actually realizes how much proper distribution costs. One of the main things that we feel is important is to offer a really good, quick, efficient back-up for customers who have bought equipment, as well as advice on the phone at any time with someone who knows the equipment inside out and knows how to use it best. Service is all—it's the most important thing. Someone spends a lot of money on a piece of equipment, they want to know that there is somebody there who is going to honor the guarantee should anything go wrong, and give advice, and it's going to be good and accurate; it's a matter of confidence.

In order to do that, we set up a plan of what we needed to do. We felt that it was important to have a technical person there on-site with a fully equipped workshop to be able to repair any of the equipment that we make.

Ken Kessler: But doesn't any good distributor do that as a matter of course?

Vereker: Not as a matter of course if one looks elsewhere in the world. Looking worldwide, there are a few of our distributors who do have some repair facilities, but the majority of our distributors return failed printed-circuit boards to us in England and all they do is change dead boards. Audiophile was the exception; they had a guy who had been over to our factory several times and was pretty familiar with the equipment, but it's not quite the same as somebody who's actually helped with developing the test procedures at Naim.

In fact, the technician at Naim North America was at Naim in the UK for five years, went out to Chicago for six months, met a nice American girl, and has subsequently gotten married, so I reckon he's there for good. That shows a whole commitment to the US. It has to be very strong and long-term to guarantee his future. We have daily contact with Naim US and the people who work there; if there's any query, they know exactly who to call, and do it without even a second thought. We have a computer link between Chicago and Salisbury; every day we look in the machine in the States, or whichever end I'm in, and see what the problems are. There'll be messages on a diary system we have. Any problems, and we can ship stuff out immediately, work out what stocks they need—all that happens every day. What we're trying to do with Naim in the US is to make it every bit as good as if it were native product.

We're one of the largest-selling high-end manufacturers in the UK. We actually ship over a million pounds' worth ($1.8 million) of electronics into the UK market each year—that's at trade price and no tax, so it's a lot more by the time the customer buys it. The number of super letters and calls we get after something has been straightened out—well, the same thing is beginning to happen in the States. It's very, very rare that there's a problem which lasts more than 24 hours, where the customer is not happy with what's gone on and we've not been able to get a dealer or one of our people to him.

If there's a problem with a customer in the US, one of our sales people will actually go and visit as soon as it is humanly possible. Obviously there's a little bit of how big a customer is; if it's a NAIT integrated amplifier, he's unlikely to have a visit the following day if he's 4000 miles away. If it was a Six-Pack owner, then it's very likely that someone would fly out that day and say, "Right, we have to get this problem licked."

Kessler: Is it safe to say that, despite the events which led up to Naim parting with Audiophile Systems, the parting was amicable?

Vereker: Entirely. Although it was not of our choosing at all, they still carried on looking after our US dealers until we actually had a chance to get ourselves set up in the States. In fact, it was one of the most amazing pleasures of all time to arrive in Chicago on a Monday afternoon and, during the week that followed, find ourselves premises, a bank, a lawyer, order a computer—we were even able to find some time for shopping. The whole thing took four days—we left on a Friday evening and everything was done. To do that from the UK would have been impossible.

From that moment on we worked really hard to get all the systems in, get all the stock arranged. Audiophile honored all their obligations as far as warrantees were concerned, provided us with all the warrantee cards so that we were able to contact every customer who'd ever filled in a warrantee card over the past 10 or 12 years of Naim being in the US, and although it was, as I say, not of our choosing, it was as amicable and honorable and straightforward a changeover as two companies have managed.

I'm not even sure, compared with some of the other distributors who also decided to stick with just Linn, whether it was entirely of the distributor's choosing. I have a feeling that they were put in a situation where they needed to make that choice because of Linn's plans on expanding to a much wider market, and they needed therefore to gear themselves in a way differently from our ideas of the ways in which our range will expand in a definite state-of-the-art direction, particularly with speakers.

I personally cannot see any reason at all for anybody—any distributor—to have dropped either. When Audiophile first knew about the Linn electronics, they said, "Right, OK, this is quite simple. We agree because Linn says this is the state-of-the-art amplifier, this is better or as good as the best Naim makes at half the money. Therefore, there is going to be a conflict." My own view was that there would be no conflict at all.

First of all, the Linn amplifier doesn't fulfill the same sort of design aim that Naim equipment does. It doesn't have an upgrade path. It's a one-product range. It has such a difference in ergonomics that either people will go for the pushbutton thing and want the remote, in which case there's no good buying a Naim, or they won't. There isn't a problem there at all.

Kessler: In the past—at least in the UK—all Naim dealers were Linn dealers, though not vice versa. How has the end of the collaboration affected you in this area?

Vereker: We actually have several dealers now who don't stock Linn; that never happened before. But this is also because there have been one or two other turntables which have appeared. The real problem (in our more naive view in the past, when we were collaborating) was that it was a Linn front end, a Naim middle, and a Linn back end. Now the minute you take away the Linn back end, then your option on turntables increases: due to the frequency response of Linn speakers, they draw attention to the faults in other turntables and ameliorate the faults in their own turntable. It was a system. The electronics actually don't enter into it. Our electronics, in any system you put them in, always improved them in the ways which were important to me in musical terms. Not necessarily in your terms of the presentation of the sound and the space and these sorts of things, but in musical terms—the tune and the intentions of the composer, the skill of the people who are performing (footnote 3). It doesn't matter what the system is.

What has happened in the UK is that there have been a few dealers who have decided that they've preferred the Linn electronics and our sales have been reduced with them a bit. By the same token there have been dealers who have maybe not sold a single piece of Linn electronics at all. That has happened with some of our largest dealers in the UK. The real problem area is when you have a whole lot of committed people in the same store and half of them prefer the Linn and the other half the Naim; they fight and the sales of both fall. Since our sales in the last quarter in the UK are up some 40%, and overall last year were up 23%, it hasn't hit sales too badly.

Kessler: What are your relations with Linn now? I get the impression that most people think you burn effigies of each other.

Vereker: No, that's not true. We still talk, but you have to bear in mind that we don't discuss the things we would have discussed before, and that the relationship is unlikely to open up. However, we did spend a lot of years having a really good time together, building our companies together, and now it's like an amicable divorce. We've done the 18 months of feeling aggravated with each other, but my impression is that Linn's direction is quite different from ours. They want to build the biggest hi-fi company in Europe, and you're not going to do that in the specialist market. It's not going to happen. We're interested in the specialist market, in doing things as well as they possible can be done, in our terms. Leave the big stuff to Philips and B&O.

Kessler: Now that you are no longer tied to Linn loudspeakers, your future involves Naim speakers. The SBL has already been launched and will be familiar to readers, but you showed the long-rumored Naim electrostatic to trade visitors at the 1987 Heathrow Penta Show in England.

Vereker: I should say first of all that it's not a full-range electrostatic; it's a hybrid. The tweeter is a ribbon unit, and the reason for that is that in order to get really good dispersion characteristics, and phase characteristics to match the character of the other two parts of the system, one needs to have a very small radiating area. An electrostatic element which does that is very, very difficult to drive. Although we've made units like that, in the end we reckoned that it was really safer to have a ribbon because it was a lot easier to drive. We don't cross over to the ribbon until about 6kHz, so power handling isn't a problem.

Footnote 2: The word "quantum" in itself only means "discrete" or "non-continuous." It does not, as is so often implied, mean a large change or improvement.—John Atkinson

Footnote 3: JV and I have opposing views regarding the importance of soundstaging, imaging, and three-dimensionality.—Ken Kessler