GPX seems out to make a name for itself
By Mary Jo Feldstein
Of the Post-Dispatch
04/14/2004
A consumer-electronics maker based in downtown St. Louis is revamping its manufacturing and sales strategies, moves industry analysts say should position the company to compete better against larger rivals.
GPX Inc. wants to distinguish its products from the mass of inexpensive DVD and MP3 players on retail shelves.
So, the 30-year-old privately held company with about $150 million in annual sales has hired an in-house design team and changed its manufacturing structure overseas.
GPX used to buy manufactured products "off the shelf" from about 40 Chinese electronics makers. GPX would distribute the products throughout North America and South America to retailers like Target and Circuit City.
That process made it difficult to differentiate GPX's products from its competitors' products, Chief Executive William L. Fetter said.
"A lot of times, some of our competitors were buying the same product," Fetter said. "Unfortunately, what happened was we just became a brand on the shelf, and there wasn't something that distinguished us."
Now, GPX's designers ask retailers about customer needs and preferences. Then, in most cases, GPX designs the products, and they're manufactured by one of about 15 Chinese electronics makers. GPX also has a China, for making products that require more technical prowess and to test new designs.
Industry analysts say partnering with retailers is a good strategy for smaller electronics makers like GPX, which struggle to compete on volume with global companies such as Panasonic. But, they say, it's nothing new.
"That's not revolutionary," said Bill Armstrong, an analyst with C.L. King and Associates in Albany, N.Y. "Retailers are the ones who have direct contact with consumers. It only makes sense to bring them early."
And, Fetter said, using fewer manufacturers strengthens their ties with GPX.
For example, GPX allows the Chinese manufacturers to duplicate its products and sell them in Asia and Europe, markets GPX has yet to enter.
Such arrangements can help to offset design costs for companies without the resources or desire to operate globally, said consumer technology analyst Peter Kastner. "Design costs need to be amortized over the global units sold," said Kastner, a vice president with The Aberdeen Group in Boston. "Therefore, creating new markets which help absorb those costs is the wise thing to do, especially in markets where a firm has no intention of competing."
Some areas of the consumer electronics market - products that use digital technology - are growing. Others, like audio equipment, are not. GPX makes products in both categories.
Overall, sales of consumer electronics totaled $96.3 billion in 2003, a 2 percent increase over the previous year, according to estimates by the Consumer Electronics Association. Fetter said GPX hopes to capitalize on growth in the industry and eventually become a public company.
GPX announced last week it had been acquired by its management team, including Fetter, and Synergy Enterprises LLC, a New Jersey-based private investment firm.
Fetter said Synergy is more familiar with the electronics industry than GPX's previous owner, the Dutch conglomerate Hagemeyer A.G., which maintains a minority interest.
GPX Inc.
Address: 900 North 23rd Street, St. Louis 63106
Sales: $150 million a year
Employees: 100 in St. Louis, nearly 500 in Hong Kong and China
Products: GPX's products include DVD and MP3 players, radios, CD and cassette players, karaoke machines
Reporter Mary Jo Feldstein
E-mail: mjfeldstein@post-dispatch.com
Phone: 314-340-8209
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