SLS Loudspeakers gets star endorsements

by Eric Olson

SBJ Reporter

eolson@sbj.net

Not many Springfield-based businesses can list Sting and Donald Trump among its endorsers and clients.

SLS International Inc. can.

As of August, the Springfield-based public company that manufactures high-tech speaker systems worldwide had signed Sting to an endorsement deal and contracted for work with Trump.

The company is unveiling a $500,000 marketing campaign next year featuring Sting and five professional athletes, including Tony Gonzales of the Kansas City Chiefs.

Sting signed a two-year endorsement contract in August, according to a company announcement.

|quot|He is our lead endorsement entertainer for the future,|quot| said John Gott, president of SLS International. |quot|He's using our equipment (and) will be in all of our advertising campaigns.|quot|

Gott said five professional athletes also will serve as spokesmen during the marketing and branding campaign: football players Gonzales, Ricky Williams of the Miami Dolphins and Zack Crockett of the Oakland Raiders, and golfers Tommy Armour III and Craig Stadler.

The name-dropping does not stop there. SLS Loudspeakers, a division of SLS International, was selected to outfit three oceanfront Trump properties under construction in Miami. The company reached a deal in July through its Florida distributor.

Speaker systems at Trump Grande International, a resort and spa, and Trump Palace and Trump Royale, residential high-rises starting at $1 million per unit, are expected to generate between $2.1 million and $7.1 million for SLS, depending on the entertainment packages chosen by residents, Gott said.

|quot|This is a tremendous association for SLS and will add a lot to our branding campaign that is just beginning,|quot| Gott said of the Trump deal. |quot|Over the next 12 months we're going to try and get the SLS name branded on a worldwide basis as the premium speaker using these stars.|quot|

Recording artist Huey Lewis is a spokesperson and investor as well, Gott said.

John Berka, senior vice president at Noble Associates, a Springfield-based marketing firm, said teaming with celebrities can put company brands on the map very quickly.

|quot|It brings immediate awareness to the brand because of the interest and association that Sting has with it,|quot| Berka said of the SLS deal. |quot|He's a solid clientele.|quot|

Berka has 25 years experience in consumer advertising, largely in Chicago. |quot|The value isn't just with the consumer,|quot| he added. |quot|The value is with the sales force,|quot| because of possible celebrity appearances at trade shows and client meetings.

Reaching the stars

According to Gott, it took only two hours to convince Sting to endorse SLS Loudspeakers. After equipping Sting's Malibu home, |quot|He called his management company two hours later and said, I want in.'|quot|

In a news release, Sting said, |quot|The SLS speaker system provides remarkable accuracy, clarity and resolution. Listening to music on SLS speakers at home is like listening to the actual live recording sessions.|quot|

The endorsement deals offer product trade-outs or stock options, Gott said.

|quot|Sting's deal was based on stock options, and he has to pay for his stock just like anybody else would,|quot| Gott said.

SLS has already felt some impact. Shortly after announcing Trump's contract, SLS stock, traded over the counter as SITI, jumped from 58 cents at the end of June to $1.77 on July 11. At press time, shares were valued at $1.50 with a volume of 86,700, according to MSN Money.

Since the announcement, SLS has contracted for 19 more Trump towers in Florida and 14 Trump towers in New York, Gott said. The new deal has not been formally announced. Gott said construction of those buildings is spread over seven years. |quot|It's a massive amount of sales,|quot| he said.

SLS International benefited from a private placement this summer that generated $4.5 million. The company held a private placement of 1.8 million shares of its preferred stock. Each share of preferred stock is convertible into 10 shares of the company's common stock after one year. The common stock underlying the preferred stock will not be registered, a release stated.

Three years in the making

Generating such hype has been three years in the making. In that time, sales have been placed on the back burner while technicians worked to tweak technologies and develop equipment. SLS has developed 70 different models of speakers and the technology that goes into them, Gott said.

|quot|We haven't really tried to make sales over the last three years. What we've done is to develop the technology and to get what amount of product we could actually manufacture into the hands of the key professionals for them to validate the technology. Now we're ready to launch the marketing and branding campaign.|quot|

Gott is anxious to see where the endorsements take the company.

|quot|We haven't peaked yet. We're starting the big peak. I really feel that we've got the product and technology that there is no reason we shouldn't have 100-plus employees in the next two years.|quot|

SLS has added five employees in the past 90 days. There are 16 employees on site, an acoustical physicist who lives in Toronto and a national sales manager, Rod Falconer hired Nov. 5, in Los Angeles. Falconer was formerly employed by JBL Professionals. Gott said there are more than 50 independent sales reps scattered throughout the world.

Closer to home, SLS is expanding its physical location to grow its production and engineering departments, and add new office space. The company has doubled its space at 3119 S. Scenic Ave., leasing an additional 15,000 square feet.