Coby Electronics Acquired by Gordon Brothers Group

Coby Electronics’ future in the promotional products industry—and in the consumer-electronics business—is uncertain.

The Boston-based Gordon Brothers Group acquired Coby’s assets in August, after Coby reportedly had two rounds of layoffs as it prepared to shut down by the end of the year. However, those plans seemed to have changed.

“As a niche market leader for over 25 years, Coby’s brand recognition and wide array of products leaves it well-positioned to continue successfully serving consumers in search of electronics at a popular price point,” Robert Himmel, the group’s co-president, commercial and industrial division, said in an August press release. “Our goal over the next few months is to transform the structure of the company allowing for a flow of new products into the marketplace in late-2013.”

It is unclear where that process stands as Himmel did not agree to an interview by press time, and nobody at Coby could be reached for comment. Multiple phone calls to its Lake Success, N.Y. headquarters were unanswered, and the public relations firm that represented Coby has not been in contact with the business since February.

Young Dong Lee started Cowboy, a consumer electronics wholesale distribution company in the mid-1980s, but wanted a to establish a brand that had a lower price point, so he founded Coby in 1991 in Queens, N.Y.

Coby found success with audio accessories at first, but has competed with larger brands with its DVD players, smaller TVs and digital photo frames as technology evolved–even breaking into the tablet market in recent years and, according to Gordon Brothers’ press release, earning $400 million in sales annually.

Coby has been a player in the promotional products industry, bringing its consumer electronics to industry trade shows for years and forming a partnership with CafePress in 2011.

But a lawsuit contributed to a string of layoffs and downsizing. Amsterdam-based Philips sued Coby in 2010 for a reseller-agreement breach when Coby China failed to pay royalties for China-manufactured DVD players that Coby distributed in the United States. Philips, who is seeking $20 million in damages, won the suit in March. It is unclear how much the court has awarded Philips.

This year, Coby laid off 42 employees (35 percent of its U.S. staff), which then-president Mike Troetti attributed in May to a decline in sales of certain products, such as DVD players and radios, and shut down its Savannah, Ga. warehouse. The next month Troetti, and 16 others–all marketing and product-management staff and all salespeople except for four–were reportedly laid off. The remaining sales team supposedly was preparing for the company’s closing by year’s end.

But then in August 2013, Gordon Brothers obtained Coby’s fixtures, equipment, intellectual property, global trademarks and patents. The group planned to invest capital into Coby to support product development and create future strategies to attain the late-2013 goal.

Gordon Brothers Group has invested in various brands with the intention of reviving them. It, in turn, has sold brands, like it did two years ago with The Sharper Image, which sold to Iconix for $65.6 million after an almost four-year brand renewal process with the Boston company. Gordon Brothers Group has also successfully reinvented brands, as it did with Linen ‘n’ Things, which switched focus from operating 371 retail stores across the U.S. and Canada to running a profitable e-commerce site.

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