CMT In Depth

Redefining Distribution Over the Decades: SFM Celebrates 40 Years

This article originally appeared in the June/July 2018 issue of Canadian Music Trade.

By Andrew King

When Sol Fleising formally incorporated SF Marketing, his eponymous sales agency, in 1978, it was a one-man operation with a corporate headquarters that also happened to be its namesake’s house.

Now, 40 years later, SFM occupies an impressive 80,500-sq.-ft. facility in the Greater Montreal area that’s home to nearly 150 employees and a diverse distribution catalog comprised of some of the top brands in the pro audio, pro visual, custom integration, and musical instrument markets.

The company’s steady growth and evolution throughout that time can be attributed to a unique approach to operations that combines the business acumen of its founder and team with the music business ethos on which SFM – like many of its peers, partners, and customers in the markets they serve – was built.

Shortly after earning his MBA in his early 20s, Fleising decided to take a year to travel the globe before formally entering the workforce. When he returned to Montreal, he got a call from his cousin, the late Eddy Shenker, asking if he was ready to get to work.

Executive-team
[Pictured: SFM’S EXECUTIVE TEAM - (L-R) MARTIN BEAULIEU, DIR. OF OPERATIONS; DITA RASMUSSEN, DIR. OF HR; JOHN WARWICK, VP OF SALES; RANDAL TUCKER, PRES. & COO; JOEY MOLINO, DIR. OF BRAND MANAGEMENT]

The job prospect was with a new musical instrument wholesale company called Golden Imports, which would later become JAM Industries. Fleising recalls being there when the company landed its first shipments from Korg and Univox and was on staff for nearly two years before setting off to Quebec City where his wife was finishing her medical degree.

In the provincial capital, he began working with a retail operation called Musique Jules Lessard. As Fleising managed the store, its namesake had acquired the GBX brand and was manufacturing guitar amps and related accessories. As stock slowly amassed, it was decided that Fleising would travel the country visiting music retailers and slinging GBX products based on regional exclusivity and healthy margins. To offset his travel costs, Fleising was seeking other lines and ended up landing Tapco as co-founder Greg Mackie was on his way out.

In 1978, his wife was finished medical school and ready to move back to Montreal. Following another period of travel, Fleising was ready to go into business for himself as a sales rep with the goal of eventually getting into distribution.

“I actually started my company with $1,000,” Fleising shares, recalling his five-year plan to raise capital as a rep to start importing merchandise. “I knew early on that I’d be more successful as a distributor than a rep, and it was actually just two years before I signed an agreement with König & Meyer [stands in 1980] to distribute their products in Canada.”

Cypihot
[Pictured: SFM’S FORMER HQ ON RUE CYPIHOT]

That year, the company moved from the Fleising residence into a new 3,000-sq. ft. office and warehouse space. Exclusive Canadian distribution agreements with now-iconic brands like QSC and Neutrik soon followed, and in the ensuing decades, the company saw its distribution portfolio grow in tandem with its overall profile.

In 2012, the company officially rebranded as SFM, formalizing an ongoing shift in its approach to business that focuses more on service and solutions than just products. That year also saw Fleising take a step back in his role with the company, handing over day-to-day operations to his executive team led by COO Randal Tucker, who has since also been given the title of president.

“I chose Randal because he shares many of the same values that I do,” Fleising offers. “He’s got a sharp outlook on the business – where we were, where we are, and where we’re going.”

Though he and Fleising first met shortly after he’d earned his MBA in 2002, Tucker started his career with SFM in 2008. “I walked into the building in 2008 like Dorothy walking into Oz,” Tucker recalls. “It was like, ‘This is so cool. I can’t believe I get to work in an industry like this.’ It was kind of awe-inspiring.”

Sol-Sidebar
[Pictured: SOL FLEISING]

Despite 2008 being a notably challenging period for the MI industry and North American economy in general, Tucker admits there was something of a silver lining to joining the company at that time.

“In a way, I think it’s good that I walked in with the crappy timing of a full-blown financial crisis and our industry’s own existential crises,” he says, reflecting. “I didn’t have the context of surprise, so I think we were able to react a lot more quickly than we otherwise would have. It kind of forced us, from a cultural standpoint and business rigour standpoint, to grow up really quickly.”

Ultimately, they weathered the storm by continuing Fleising’s longtime approach to the music business – maintaining the balance between the music and the business.

“A big part of our ability to get through that and reposition ourselves over the past few years goes to another of Sol’s guiding principles, which is something that I think is unique in our industry and really aligns with my own values: always reinvesting in the company,” Tucker tacks on. “It’s this concept of, even in tight times, putting resources back into the business and making investments for when things turn around.”

MI-Team
[Pictured: SFM’S MI TEAM: (L-R) SHAWN CABRAL, BRAND MGR. & ERIK LIND, BRAND MGR. MISSING: JOHN KELLEY, GM, MI BUSINESS UNIT]

Since, SFM has returned to its tradition of steady year-over-year growth, though Tucker and his team refuse to be lulled into any type of complacency.

“We’re constantly keeping our feet moving here,” he shares about the company’s more recent direction. “It comes down to continually asking everyone here: ‘Why are we necessary?’ Distribution is an old business model, so we’ve been rethinking what that means. That involves continually asking a lot of questions about what we do – sometimes difficult questions, and we don’t always get the right answer, but we spend our time thinking, ‘How do we offer something that’s relevant and valuable to our customers, end users, and suppliers?’”

CI-Team
[Pictured: SFM’S CUSTOM INTEGRATION TEAM: (L-R) SIMON TOURNAY, BRAND MGR.; CLAUDIA L’ECUYER, MARKETING PROJECT MGR.; STEVEN FREYTAG, GM, CI BUSINESS UNIT]

Fortunately, much of the value they provide is inherent in the quality of their distribution catalog across their five divisions: Pro Audio, Pro Visual, Custom Integration (CI), Canadian MI, and American MI.

SFM is the home to many iconic and industry leading brands – Shure, Alvarez, Casio, and Pioneer DJ; QSC, EAW, and Genelec in the Pro Audio realm; Christie, Elation Professional, and ADJ in Pro Visual.

Some are more recent additions – established brands seeking a high profile, highly regarded distribution partner in an important market. Others, though, are rooted in longtime partnerships built on shared values and principles with companies that have grown in tandem with SFM over the years.

Joey Molino, the company’s director of brand management, notes that the supply chain has been a strong focus in SFM’s operations over the past two years or so. “That’s a very vast area, but it’s been important to be able to streamline things and make the process efficient from purchasing your product from the supplier all the way down to the customers,” he says. “We’re investing in improving our processes, hiring the right people, and bringing outside help where we need to.”

That last point in particular is something Molino appreciates about SFM’s corporate culture. “We’re not afraid to say, ‘Let’s bring in some outside help to get better in a specific area,’” he shares. “I have great colleagues and it feels like everyone is there, working together to move this company in the right direction. We’re thinking long-term and not afraid to try things.”

As Mike Gregory, director of sales, pro business unit, explains, “The way we’re selling is different now that it was 10 years ago, or even five years ago. We’ve adopted a systems-based approach on the integration side of the business, where it’s been about building an end-to-end solution, and in general are focusing more on being a services and solutions company that also sells products instead of being entirely product-centred.”

Audio-Team
[Pictured: SFM’S PRO VISUAL TEAM: (L-R) CLAUDIA L’ÉCUYER, MARKETING PROJECT MGR.; FRANCO CARUSO, BRAND MGR.; NICK MARTINO, APPLICATION SPECIALIST; JUSTIN GAUTHIER, BRAND
MGR.]

Marketing Manager Lisa Griffiths builds on that point: “At the end of the day, when we talk to our clients, the impression they have of SFM is based on the people in the company, and we want to build on that. When Randal asks, ‘How do we differentiate ourselves?’, the key there is to focus on our people and our services, not just our lines.”

She points to SFM’s work in the still-growing area of ecommerce as an example. An ongoing project for the team has been developing an ecommerce infrastructure that allows multiple outlets to get current, quality information and content for their individual platforms. “The customer experience is always under review here,” Griffiths asserts, “and this was something that we were in a unique place to provide in order to give our customers more value, which ensures mutual success.”

That formula of continually rethinking systems and processes has proven to be a winning one, as SFM’s total sales have doubled in the past decade, surpassing $70 million in 2017/18.

In Gregory’s words, that success is the result of “being adaptable to the market, and not trying to make the market adapt to you.”

While they may not have always been touted as loudly as they have been lately, the cornerstones of SFM’s business – always adapting to the market, adding value at every possible stage of a transaction, and continually reinvesting in the business – have existed since Fleising was driving across the country selling guitar amps and speakers to Canadian music stores in the late ‘70s. Put simply, SFM’s ongoing success is based on a balance between its proven and continually refined business practices and its rock and roll roots.

“We’ve always kept the customer at the centre of our business,” says Fleising. “Everyone has to win to do good business, and that’s what we strive for. I treat our employees, customers, and suppliers how I’d like to be treated. It’s a very simple mantra.”

SFM Timeline

1978
SF Marketing Inc. incorporates as a sales agency with founder Sol Fleising’s home functioning as company headquarters.

1979
The NAMM Show leads to rep agreements with Furman & Littlite, among others.

1980
Transformation from a rep agency to a distributor with the signing of an exclusive distribution agreement with König & Meyer. Exclusive distribution agreements with QSC & Neutrik follow shortly thereafter. Corporate headquarters moves to 3,000-sq. ft. office & warehouse space at 312 rue Benjamin-Hudon in Ville Saint-Laurent

1982
Appointed as the Symetrix distributor for Canada. Hiring of first full-time service technician to avoid having to ship broken products back to the supplier – a service now called sfm.fix.

1986
Expansion into 6,000 sq. ft. of office & warehouse space at 3524 rue Griffith in Ville Saint-Laurent. Implementation of seasonal & project-based financing for dealer network, a precursor to sfm.money.

1990
Introduction of Digiflex Custom Manufacturing, producer of custom snakes for production companies.

1992
Expansion of sales force to five captive sales reps. Headquarters relocated to a custom-built 24,000 sq. ft. facility at 6161 rue Cypihot in Ville Saint-Laurent.

1995
Creation of a technical sales support department as a distinct element of the overall service offering – a service now known as sfm.tag.

1999
Appointed as Canadian distributor for Shure. Cypihot facility expands to 40,000 sq. ft. & sales force expands to 10 captive reps.

2002
Introduction of SFM CI, which specializes in providing products & supporting services for dealers operating in the residential & light commercial AV install markets.

2003
SF Marketing celebrates its 25th anniversary. Sales force expands to 13 captive reps. SFM MI makes its foray into the U.S. market.

2005
SF Marketing relocates to current facility on Bouchard Boulevard in Dorval, with 30,000 sq. ft. of office space, 50,500 sq. ft. of warehousing & a large showroom dedicated to product demonstrations.

2008
The first edition of CITT/ICTS’ Rendez-vous takes place at corporate headquarters. This event for theatres, production companies, and AV systems integrators becomes an annual tradition.

2012
Rebranding of the company to SFM marks a break from its genesis as a sales agency. Fleising passes the torch on the running of the day-to-day business to his executive team and names Randal Tucker as Chief Operating Officer

2013
Annual sales pass the $50 million threshold. The addition of Christie Digital & ADJ, plus Elation a year later, firmly establishes the Pro Visual division.

2014
Randal Tucker becomes President & COO

2015
Formal implementation of a business unit & supporting divisional structure splits the company and sales forces into five distinct divisions (Pro Audio, Pro Visual, CI, MI Canada, and MI USA) operating on a single administrative and logistical backbone.

2016
Annual sales pass the $60 million threshold.

2018
SFM celebrates its 40th anniversary. Annual sales pass the $75 million threshold as the company expands its reach into the unified communications market via major investments in TAG resources, as well as the launch of service offerings specifically tailored to the converging world of AV and IT.

END

Andrew King is the Editor-in-Cheif of Canadian Music Trade.