SLS strikes Wal-Mart deal, launches ad campaign

SLS International Inc. announced March 31 that its Q-Line Silver Surround Sound Home Theater System would be available in select Wal-Mart stores beginning Sept. 1. St. Louis-based Ad One Media Inc. is in charge of the campaign.

SLS CEO John Gott said the Q-Line Silver, which is named after and endorsed by 27-time Grammy award winner Quincy Jones, will retail at $498. SLS has paid Jones $1.4 million in stock and stock options and $250,000 cash.

Gott said that he had been negotiating with Wal-Mart since last September. He was unable to disclose which stores will initially carry the product.

“It rolls out in a select number, a test market. ... In 2006, we expect to be in all their stores,” he said.

Ron Mergel, operations manager for Ad One Media Inc., said that advertising the SLS name on a national level is vital for the company to compete against nationally known brands such as Bose and to catch the attention of other retailers.

“You may know (SLS) very well, and you may say that’s the greatest speaker in the world, but that’s not national advertising. For the big companies to get involved, you have to do national,” Mergel said.

The campaign kicked off with mobile billboard trucks at the Super Bowl and the Daytona 500.

Two SLS billboards featuring Quincy Jones debuted last month in Chicago, and city buses in St. Louis and other cities will be covered in a vinyl wrap version of the billboard from August through the end of 2005.

SLS banners are placed at National League and American League baseball spring training facilities that will host minor league baseball games, and 37,000 banners have been produced to send to youth soccer leagues across the country. More than 4 million soccer team shirts will feature the SLS logo.

“That’s huge. Those soccer shirts go through the washing machine, moms and pops see those, you go after the soccer game to McDonald’s or all the restaurants. They travel around and wear the shirts everywhere,” Gott said.

SLS continues to develop new products, and Gott said three models of headphones are now in research and development.

“We expect to bring those out and at least one of those will be associated with a star,” he said.

Also in research and development are iPod compatible docking stations and XM satellite radio compatible products.

The company employs 37. Gott said that seven or eight people have been hired since mid-March and he anticipates hiring 12 more by summer.

SLS International stock is traded over the counter (OTC: SITI.OB) and closed at $2.36 per share April 13.

Unaudited gross sales for the first quarter of 2005 are $869,000, Gott said, compared with $421,000 for the same period last year.

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