News

Krell Working to Resume Operations

Jason Victor Serinus  |  Aug 29, 2024

On August 29, 2024, Wm. R. Kennedy Buhler, aka Wil Buhler, informed Krell dealers, distributors, and customers that Krell is well on the path to reopening.

"We have made significant progress over the past weeks in our efforts to resume operations," Buhler wrote in a letter. "Following the recent passing of our beloved leader, Rondi D’Agostino, ... we are still in the midst of the ongoing probate process, which is taking slightly longer than initially anticipated. Please be assured that we are doing everything within our power to expedite this process. We are confident that we will be able to complete it very shortly and resume full operations soon after."

Buhler is one of five equal partners in J.F. Bicking & Co., a management consulting firm and family business that was initially engaged by D’Agostino to help Krell "strategically accomplish its goals." J.F. Bicking’s involvement can extend to assisting with mergers, acquisitions, or restructuring. According to Buhler, "Our family business often comes in as a full business partner, helps break everything down to its core, and restructures companies in ways that allow innovation in core operational practices and greater operational efficiency."

During extended conversation with Buhler shortly after D’Agostino’s unexpected death on June 18, he told me that he and his family partners were wowed by the sound of Krell gear and are firmly committed to continuing "Rondi’s legacy of excellence."

This is a developing story. Stereophile will provide updates as they become available.

COMMENTS
a.wayne's picture
Submitted by a.wayne on August 29, 2024 - 2:17pm

Really hope they get Krell back up and running , hate losing these type of Iconic Audio companies ...

supamark's picture
Submitted by supamark on September 1, 2024 - 11:03am

Just bury it already, the stench is getting bad. Dan was Krell, and he's got a new company making new (and very fugly) products that are well reviewed. That's essentially Krell now, and the old Krell is dead.

I'd honestly rather see Tandberg come back (the company still exists, but stopped doing consumer audio about 25 years ago).

CG's picture
Submitted by CG on August 30, 2024 - 10:38am

Private equity. God help them...

DaveinSM's picture
Submitted by DaveinSM on August 30, 2024 - 3:37pm

Oh, I know! Selling their soul to the devil, who then sucks the husk dry before abandoning the whole deal. Especially if the new owners aren’t hi fi guys and don’t have much experience in the market… which appears to be the case here.

We’ll see. If Krell starts rolling out cheaper, less robust designs - as has already been the general trend over the past several years- or heaven forbid, starts getting into the lifestyle market — then I’d bet that will signal the beginning of the end. Krell started out as unique and completely uncompromising amplifier company, but they sure as hell won’t end up that way.

I would’ve said that they should’ve waited till another audio holding company (like Harman) buys them out, but the end result could end up being the same.

JRT's picture
Submitted by JRT on August 30, 2024 - 4:20pm

"I would’ve said that they should’ve waited till another audio holding company (like Harman) buys them out, but the end result could end up being the same."
- DaveinSM

While not owned by private equity, Harman is now and has been a wholly owned subsidiary of Samsung since early 2017.

James Romeyn's picture
Submitted by James Romeyn on August 30, 2024 - 6:48pm

I wonder if Harman selling Krell and Levinson weakens both brands.

DaveinSM's picture
Submitted by DaveinSM on August 30, 2024 - 7:00pm

Good point. It probably would, since they’ve traditionally gone after the same market. If Harman did buy Krell, I’d expect them to downmarket Krell to avoid that potential conflict.

But Masimo Consumer owns Denon and Marantz, as well as Polk, DefTech, and B&W. There’s gotta be significant market overlap with these brands, yet I don’t think many people know that they’re owned by the same company.

As with another commodity industry, sunglasses, many distinct, well known fashion brands are actually owned by major parent companies like Safilo and Luxotica.

CG's picture
Submitted by CG on August 31, 2024 - 7:36am

I'm not sure how well that one has worked out.

https://www.strata-gee.com/masimo-q2-fiscal-2024-results-show-healthcare-rebound-but-audio-declines-double-digits/

DaveinSM's picture
Submitted by DaveinSM on August 31, 2024 - 8:37am

Not surprised. What I’ve seen in a similar industry is when this happens, the parent company stops the bleeding by selling off assets, layoffs, and consolidating things like marketing. Basically, they start gutting operations to get to profitability, and in the process destroy morale and alienate personnel at the child company.

It’s heartbreaking for management and senior staff. Once you start seeing them go, it’s the end of the company as we knew it.

BTW, Strat-a-gee is a very interesting site. I used to visit it regularly when things were going down for Thiel (Deja vu). The site also had excellent blow by blow news coverage of the twists and turns at Onkyo, Gibson, and others.

CG's picture
Submitted by CG on August 31, 2024 - 9:41am

Don't forget the parts about financing the purchase with debt that the purchased company has to pay off and the "consulting" fees the purchaser charges to make everything better.

Kinda like organized crime, when you think about it.

DaveinSM's picture
Submitted by DaveinSM on August 31, 2024 - 2:09pm

They’re like lawyers- the only ones who are guaranteed to make money on the deal, no matter what the results.

So many independents find themselves strapped for capital and resources, along with overworked founders. They’re lured by the promise of some breathing room and cash for expansion…. But hi fi is a finite and shrinking market. It’s been that way for decades, and was greatly accelerated by the decline of physical media thanks to digital moving to the PC and streaming.

CG's picture
Submitted by CG on August 31, 2024 - 3:15pm

I think you're probably right about the hi fi market. Around the turn of the century was when megabuck systems started to really be visible. With a finite market, a lot of companies apparently determined that selling more expensive gear to their existing customers was the path to economic nirvana. It worked for some, too. But, at the same time a lot of companies that aimed toward the upper middle class enthusiasts kind of fell by the wayside for one reason or another. That left a hole in the middle of the market, which used to be a place where companies could thrive.

Back around 1990, a Krell KSA-150 retailed for about $3500. That'd be about $8400 in 2024 inflation adjusted dollars. An $8400 amplifier wouldn't get much review space in the, ahh, review spaces of today. At the time, a KSA-250 cost more as did the Levinson equivalents and so on. But, $3500 was considered a real expensive item. Aragon 4004's were close to the same circuit as a KSA-150 and cost about half - I think Mondial sold a lot of those. Adcom sure sold a lot of GFA-555's at the time, and they were less than half the price of a 4004. Where are the equivalents to any of those today? No wonder a lot of brick and mortar stores closed. That couldn't have helped the likes of Krell.

Anyway, starting back around the mid-aughts or so, Krell had a couple really bad things happen to them. One was that Dean Roumanis passed away. I think that really had a negative effect on the company. The second was that a serious recession followed pretty shortly after. That had to have hurt the Krell business. It would've been tough to recover from either of those, never mind both.

Couple all that with Krell's move to a loftier market and expanding into loudspeakers and this:

https://www.cpsc.gov/Recalls/2009/Amplifiers-Recalled-by-Krell-Industries-Recalled-Due-to-Fire-Hazard

and you've got a handful.

I'm sure a lot of sharks smelled the blood in the water then and saw an opportunity.

MatthewT's picture
Submitted by MatthewT on August 31, 2024 - 4:14pm

Was the one that burned up for Art Dudley.

DaveinSM's picture
Submitted by DaveinSM on August 31, 2024 - 4:55pm

Nice analysis. Yeah, an $8400 stereo power amp today implies a system in the low to mid five figures. Many who can afford that can also afford six figure systems. The middle class has contracted, and the upper middle class are fewer in number and relatively wealthier.

I’d also say that that the multi channel home theater boom also really hurt the mid fi market for stereo products. Middle class families have been buying AV receivers and surround sats/subs and making them do effective double duty as all-in-one home theater and music systems. And even some of these got to be pretty spendy, if not exactly purist.

The dedicated stereo audiophile and his setup has been a dying breed ever since.

IMHO Dan D’Agostino has done a brilliant job in executing and marketing a strong aesthetic design language from the get-go in highly distinctive products that aim for and successfully hit the megabuck audiophile market that you mention. And he’s smartly stuck to his Krell bread and butter- amplification.

D’Agostino amps hold their value well on the used market, which just shows how well he’s succeeded in making a desirable, aspirational product. He’s basically successfully taken his version of Krell upmarket. Really smart.

And D’Agostino’s Classic and Progression lines have given Krell one less place to go.

supamark's picture
Submitted by supamark on September 1, 2024 - 12:23pm

The brands are tanking and Masimo has vowed to get rid of Sound United one way or another. I'm sure they can get a decent return on B&W individually, don't know if anyone wants the other brands (but I'll take the Boston Acoustics name off their hands, at the right price of course - the company itself was shut down so no assets/debts to deal with, just the name).

supamark's picture
Submitted by supamark on September 1, 2024 - 11:13am

but that is just a brand, no products. I expect Masimo will shutter everything but B&W, one of Denon/Marantz, and probably Polk. Or split Denon and Marantz between value and quality to give them a value line and an audiophile line.

If I ever decide to persue my dream of building speakers, I'mma see what they want for the Boston Acousitcs name. Or I'll call it Austin Acoustics and sell an A73, A101, and A404 ripping off the old A70, A100, and A400 designs with modern components/cabinetry - AKA the Behringer business model, but with high quality instead of cheap crap.

DaveinSM's picture
Submitted by DaveinSM on August 30, 2024 - 5:08pm

Yeah, I did a little digging and found that on their website. Sorta like how KEF was acquired by Gold Peak. In fact, tons of familiar hi fi brands are currently owned by Chinese companies like IAG Group.

I was also surprised to find that B&W was acquired by a US based private equity group, Sound United.

So I guess there is hope that they’ll survive and be left alone enough to continue to operate somewhat independently….

I was saddened to see Infinity languish under Harman and hoping the same thing won’t happen to Krell.

supamark's picture
Submitted by supamark on September 1, 2024 - 11:16am

by Gold Peak (based in Hong Kong) in the early 80's while Hong Kong was still a British colony. Not quite the same thing, since the PRC hadn't begun its march to manufacturing dominance (which is now fading) or even had political control of Hong Kong at the time.

James Romeyn's picture
Submitted by James Romeyn on August 30, 2024 - 6:45pm

A world without Krell? Wake me from this nightmare.

How and why did Rondi not legally setup operations to continue seamlessly after her "departure?" File under "strange, careless and potentially fatal audiophile business decisions."

CG's picture
Submitted by CG on August 31, 2024 - 8:04am

I'm somewhat local to both Krell and the Levinson design division. So, we get local news items on occasion for both that don't turn up nationally.

Krell has had financial challenges for quite some time. In fact, that was apparently why Dan left the building quite some time ago. (Not suggesting anything shady - I wouldn't know.)

Here's a couple links that you might want to check out:

https://www.codywhitefuneralservice.com/tributes/Rondi-H-DAgostino

https://www.casemine.com/judgement/us/5c38ca84342cca179b7948b6

https://hometheaterreview.com/what-happened-at-krell-and-why-the-dagostino-family-is-out/

https://www.twice.com/news/krell-founders-sue-equity-fund-return-company-18287

https://casetext.com/case/ki-inc-v-kp-acquisition-par-no-x05-cv-09-60027474s-sep

https://www.psaudio.com/blogs/copper/walter-schofield-of-krell-industries-part-two?srsltid=AfmBOorGM6jMCOhbSMDQteAARhJQphkIT9-kR_i90ZVxbnpdqc486LfO

So, judge for yourself. I'm not here to criticize Krell or anybody else. All sorts of companies have challenges along the way. Sometimes it works out well, sometimes not so well.

Just remember that maybe about a third of what you read in the press - whatever press - is accurate and not just some conclusions based on speculation. Also, you can be sure that there's almost always more to each story than what is portrayed. You can see some of that in the links above.

MatthewT's picture
Submitted by MatthewT on August 31, 2024 - 9:09am

Nt

jimtavegia's picture
Submitted by jimtavegia on September 1, 2024 - 10:21am

If Mr. Buffet is dropping all his bank stock I would not hold my breath. The Davos crowd can only buy so much gear. I am surprised that many high end companies are still around given the volatile economy, yet I know that not everyone is playing the shell game.

As a note, I had the chassis mount USB pull off the chassis moving the DAC to a new location. Project told me that the repair would cost more than replacing the unit with a new one. I know it was only $299, but really. It was a micro B connector, a bad choice for frequent use.

No more Project in this house.

supamark's picture
Submitted by supamark on September 1, 2024 - 12:09pm

Is basically the consumer audio version of Behringer (bottom of the barrel pro audio company). They copy other people's designs and sell them at a lower price point using cheap components and mfg. They're even based in the same city in Austria. They're both parasites.

jimtavegia's picture
Submitted by jimtavegia on September 1, 2024 - 2:06pm

They have some pretty pricey products as well. The problem here is their wrong choice of USB connector. I have plugged and unplugged my Samsung phone with never an issue, almost daily. My wife and her IPhone the same. I think I have unplugged this S2 DAC about 6 times. On the lower end I just buy more Schiit that I have never had an issue with ever.

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