Emerson Radio Corporation was founded in 1948. It is one of the United States’ largest volume consumer electronics distributors and has a recognized trademark in continuous use since 1912. The company designs, markets and licenses many product lines world-wide, including products sold, and sometimes licensed, under the brand name G Clef, a homage to Emerson's logo.
Emerson Radio and Phonograph paid $6 million to purchase the consumer products division of Allen B. DuMont Laboratories, Inc. in 1958. With this acquisition, a higher-priced line of television sets, phonographs and high-fidelity and stereo instruments, along with the DuMont trademark was added to Emerson's products. Unfortunately, by this time, almost every U.S. household that wanted a TV set already had one, and many customers who were in need of another set were waiting for color television instead of buying a replacement. Sales fell from $87.4 million in fiscal 1955 to $73.9 million in fiscal 1956, when the company earned a paltry $84,852.
A cost-cutting campaign by Abrams rebounded net income which reached $2.7 million in fiscal 1959 on sales of $67.4 million. In fiscal 1964 (Emerson's last full year of independent operation) it earned $2.1 million on sales of $68.2 million.
Between 1967 and 1971 the National Union Electric division lost about $27 million due to too little volume to cover costs. The division contracted out the manufacturing of television sets and some other home entertainment products to Admiral Corp., and laid-off 1,800 employees. In addition to importing some of its home entertainment products from the Far East, Emerson continued to be responsible for design, engineering, and marketing.
In late 1972 National Union Electric announced that Emerson was discontinuing distribution of television sets and other home entertainment products. In 1973 Emerson sold its license for marketing products under the Emerson name to Major Electronics Corp. Founded in 1948 by Melvin Lane and incorporated in 1956, this Brooklyn-based company originally made children's phonographs. The company later diversified into the production and sale of a broad line of low-priced home entertainment products that included stereos, radios, and clock radios. In 1971 Major also began importing low-cost radios. By 1975 the company was only manufacturing portable phonographs. In 1976 the company moved its headquarters to Secaucus, New Jersey, and changed its name to Emerson Radio Corp. in 1977.
Sales rose from $11.5 million in fiscal 1975 to $49.2 million in fiscal 1978, the year in which phonographs, radios, tape recoders and players, compact stereos, digital clock radios, and other low to medium-priced electronic equipment was being imported, assembled, and marketed, primarily under the Emerson name. Approximately 60 percent of its components were being imported from the Far East and 20 percent from each Great Britain and domestically, and assembled in either Secaucus or Sun Valley, California.
In 1979, Emerson began selling Heart Aid, after purchasing a large portion of Cardiac Resuscitator Corp., a near-bankrupt company. Emerson spent heavily to develop and produce both an improved Implantable cardioverter-defibrillator and a pacemaker. In addition, the company took an 18 percent share in a developer of Computerized Axial Tomographic (CAT) scanners. Because this line of products never made money, Emerson disposed of its holdings in them between 1987-88.
Emerson Radio dropped its last U.S.-made product, the phonograph line, in 1980 because it became unprofitable due to rising labor costs. Despite harsh competition, Emerson Radio raised its sales and earnings in fiscal 1980 to $81.9 million and $1.6 million, respectively. Their plan was to have their suppliers (mainly in Taiwan and South Korea) to imitate Sony and Panasonic audio/video products and then sell them at a lower price.
In 1985 a compact disc player and microwave oven were introduced causing sales to once again double in fiscal 1985 to $357.5 million, and net income rose to $13.3 million. TV sets and VCR's accounted for two-thirds of sales that year. Later that year, Emerson Radio moved its headquarters to North Bergen, New Jersey, and acquired H. H. Scott, Inc., a company that manufactured high-fidelity audio and visual equipment. Products were sold under the Scott name until 1991, the year the line was discontinued.
In 1986 Emerson began importing and marketing compact refrigerators and Hi-Fi stereo VHS VCRs. Camcorders, telephones, and answering machines were added to its product line in fiscal 1988. In 1990 personal computers and facsimile machines were added for a major roll-out to more than 500 Wal-Mart stores. In 1992 sales reached a peak of $891.4 million, unfortunately, net income was a lowly $10.4 million.
Emerson's addition of personal computers ended up being a catastrophe for the company--a $150 million loss. That coupled with the recession that began in 1990 brought the company's total loss to $37.5 million in the last nine months of the year. Shares of stock fell as low as $2, compared to the high of $12.75 in 1987. Several shareholder suited charging some Emerson directors and officials with breach of fiduciary duty and self-dealing. Emerson also fell into technical default on its long-term debt of $55.4 million at the end of the year.
In 1994, the company emerged from bankruptcy pursuant to a plan of reorganization and with $75 million in financing arranged by Fidenas, which had assumed a 90 percent stake in Emerson. It then issued 30 million shares, some of which were claimed by creditors. Legal battles ensued and continued until mid-August 2001.
In early 1995, in an effort to cut costs, Emerson Radio licensed the manufacture of certain video products under the Emerson and G Clef trademarks for a three-year period to Otake Trading Co. Ltd. The company also licensed the sale of these products in the United States and Canada for the same period to Wal-Mart Stores, Inc. As a result, Emerson's net sales fell from $654.7 million in fiscal 1995 to $245.7 million in fiscal 1996, with the licensing agreement only providing about $4 million a year in royalty income.
Also in 1995, Emerson Radio entered the home theater and car audio fields, and the $900-million-a-year home and personal security market with a carbon monoxide detector. The company planned to eventually lend its name to burglar alarms, motion detectors, personal alarms, smoke detectors, and safety lights, however, the company left this field in fiscal 1997. Additionally, Emerson announced it would license the Emerson name to more than 250 audio and video accessories made by Jasco Products Co., an Oklahoma firm selling cables, remote controls, and appliance cleaning devices.
The company took a 27 percent stake in Sport Supply Group, Inc., the largest direct-mail distributor of sporting goods equipment and supplies to the U.S. institutional market, for $11.5 million, in late 1996.
Subsequent to a net income of $7.4 million in fiscal 1995, Emerson dropped into the red again the following three years. They lost $13.4 million, $24 million, and $1.4 million in fiscal 1996, 1997, and 1998, respectively, with net revenues of $245.7 million, $178.7 million, and $162.7 million.
Emerson Radio Corp. announced in November 1998 that it had entered into an exclusive agreement with Team Products International, Inc. of Boonton, N.J., a distributor of audio, video and other consumer electronic product accessories in the United States and Canada. They would promote the sale of a wide variety of Emerson branded consumer electronic products and accessories.
The owner of Fidenas's, Geoffrey P. Jurick, had assumed the position of Chief Executive Officer (CEO) of the company in 1992 and in 1998 he added the titles of President and Chairman of the Board. In December 1998 he held 60 percent of Emerson's common stock, during which time Kenneth S. Grossman, a private investor, along with Oaktree Capital Management, a Los Angeles-based investment firm that held a smaller stake in Emerson Radio, proposed to buy Jurick's holdings in the company for more than $14.6 million, but the offer was rejected as "inadequate. Emerson announced in August 1999 that it planned to sell to Oaktree for $28.9 million.
On the day the licensing agreement with Otake expired, Emerson replaced the company with Daewoo Electronics Co. Ltd., which entered into a four-year agreement with Emerson to manufacture and sell television and video products bearing the Emerson and G Clef trademark to U.S. retailers. In 1999, Emerson also signed five-year license and supply agreements with Cargil International covering the Caribbean and Central and South American markets, along with WW Mexicana for certain consumer products to be sold in Mexico. They also had a licensing agreement with Telesound Electronics for telephones, answering machines, and caller ID products in the United States and Canada.
Net income for Emerson was a meager $289,000 on net revenues of $158.7 million in fiscal 1999 with a long-term debt of $20.8 million at the end of the fiscal year. Nearly 84 percent of its merchandise that year was imported, primarily from China, Hong Kong, Malaysia, South Korea, and Thailand. Tonic Electronics (32 percent), Daewoo (22 percent), and Imarflex (12 percent) were its main suppliers. The company depended heavily on Wal-Mart Stores, which took about 52 percent of its goods in fiscal 1999, and Target Stores, Inc., which took about 24 percent.
Emerson's main focus is the distribution and sale of low to moderately priced products, therefore their distribution is primarily through mass merchants, discount retailers, specialty catalogers, and the Internet. As a brand, Emerson gains further leverage globally through various licensing agreements. For example, Emerson brand TV, DVD, TV/VCR/DVD combination units are made by Funai.
The "peewee" radio was introduced December 1932. Measuring about 8 1/2 inches long and 6 1/4 inches wide, approximately 60 percent of all radios sold between early December 1932 and late May 1933 were peewees, half of which were manufactured by Emerson. The Universal Compact line was priced from $17.95 to $32.50. Emerson led the production and sale of this class of radio until 1938, having by then sold more than a million.
In 1947 Emerson offered a television set with a 10-inch tube, which retailed for $375. It was among Emerson's first postwar products. They dropped the price to $269.50 by June 1948, when the newly developed television industry had sold 375,000 sets.
In 1953, Emerson Radio and Phonograph purchased Quiet Heet Corp., which entered the company into air conditioning.
Production of tape recorders began in 1955.
When Emerson purchased Allen B. DuMont Laboratories, Inc. in 1958, a higher-priced line of television sets, phonographs and high-fidelity and stereo instruments, along with the DuMont trademark was added to Emerson's products.
In 1979, Emerson began selling Heart Aide, after purchasing a large portion of Cardiac Resuscitator Corp. The company spent heavily to develop and produce both an improved Implantable cardioverter-defibrillator and a pacemaker. In addition, the company took an 18 percent share in a developer of computerized axial tomographic (CAT) scanners. As this line of products never made money, Emerson disposed of its holdings in them between 1987-88.
Emerson manufactured the Arcadia 2001, the most well-known of the "Emerson Arcadia 2001" second-generation 8-bit game console variations. Although, considerably more powerful than the then-dominant Atari 2600, the Arcadia 2001 wasn't released until just before the more-advanced Atari 5200 and the ColecoVision, in mid-1982. It was successful in other countries, however, because Atari had exclusive rights to many games, it was nearly impossible for Emerson to market in the United States due to the lack of popular game titles.
In 1983, Emerson began selling re-branded Goldstar televisions at inflated prices for a substantial profit. The compact disc player and microwave oven were introduced in 1985 doubling sales. In 1986 Emerson began importing and marketing compact refrigerators. Camcorders, telephones, and answering machines were added to its product line in fiscal 1988. Personal computers and facsimile machines were added in 1990.
In 1995, Emerson Radio entered the home theater and car audio fields, and the $900-million-a-year home and personal security market with a carbon monoxide detector, however, they left this field in 1997. Also in 1995, Emerson announced it would license its name to more than 250 audio and video accessories made by Jasco Products Co., a firm selling cables, remote controls, and appliance cleaning devices.
Emerson began manufacturing and selling television and video products bearing the Emerson and G Clef trademark to U.S. retailers in 1999. They also had a licensing agreement with Telesound Electronics for telephones, answering machines, and caller ID products in the United States and Canada.