Red Witch History - A Synopsis

2003-2009: Start-up

2003:  Ben Fulton starts Red Witch. The first hand made pedal launched is the Deluxe Moon Phaser and is enthusiastically received in the market.

2004:  USA dealers are obtained.

2004:  The Fuzz God II and Medusa pedal are launched.

2005:  The Pentavocal Tremolo pedal is launched.

2006:  The Empress Chorus pedal is launched.

2007:  Sales increase to the point that hand made production is no longer viable. Production is moved from Paekakariki to Taiwan.

2007: USA distributor Dana B Goods is appointed.

2009 - 2011: Growing the Company

Amcham - Success and Innovation awards 2012 - Exporter of the Year to the USA under $500,000

Amcham - Success and Innovation awards 2012 - Exporter of the Year to the USA under $500,000

By 2009 the growth in sales had outstripped Red Witch's ability to fund the capital requirements of manufacturing and holding larger amounts of stock.

Red Witch needed a larger capital base than just Ben Fulton, and in 2009 Geoff Matthews and his business partner Trevor Nicolson, invested in the company.

For a company with only one employee and focused on product development, headline growth numbers between 2009 and 2011 were none the less pleasing;

  • Turnover increased by 365%
  • Gross profit increased from 29% to 56%
  • FYE 2011 EBITDA of 8.3%
  • Product Range grew from 4 to 14 guitar effects pedals.

Furthermore, the company managed to expand the rest of the world sales to keep pace with growth in the major market the USA, which traditionally accounted for 50% of sales, and also introduced a new line of pedals at a lower price point without eroding the Red Witch’s premium brand positioning.

When we first invested in Red Witch Analog, we completed a competitor analysis particularly in high-end boutique companies with mass production capabilities.

It showed that of the competitors we admired, one had 42 pedals in their range, and another had 36 and the other 32. At that time Red Witch Analog only had four.

When I asked Ben how many pedals did he think we needed to provide a ‘full suite’ of products, he said his vision was for 19 products including the Seven Sisters range and bass pedals.

We therefore set Red Witch on a strategy of increasing the IP and value of the company by growing the pedal range. While it was hoped that the turnover of the company would increase as new pedals were brought to market, we recognised that for the time being Red Witch would primarily be a product development company.

The long-term strategy was that once we had a full suite of products, the company would refocus its energies and embark on growth strategy driven by marketing, and funded by new investment.
— Geoff Matthews

The 'Squiggly Path': 2011 to 2014

While as a company Red Witch believed they had escaped the worst of the Global Financial Crisis (GFC), it became apparent in 2011 that the effect of the GFC on the world’s distribution of musical products was only really starting to bite.

Customers were seeking bargains, distributor and retailers margins were being squeezed, and online lowest price mega warehouses like amazon.com were moving into the music industry (as well as everything else).

Firstly Red Witch's boutique USA distributor, Dana B Goods, was forced to wind back its operation.

Red Witch then moved distribution to the USA’s second largest music distributor, Hanser Music, in 2011 and officially launched the Seven Sisters.

While things initially looked promising, the move proved disastrous for Red Witch. Hanser changed the nature of its sales force from having an on the road presence to having phone based representatives. Hanser made these changes without any notification to Red Witch and it was a number of months before the resulting lack of sell-through to dealers flowed through to Red Witch, as Hanser had continued to order and accumulate stock during this period. 

Red Witch was between a rock and hard place.

Red Witch was resourced to develop IP, not to manage its own sales and distribution in the USA, as it only had one employee at this stage.  Even if Ben Fulton was taken off product development, it would have taken months and further investment to gear Red Witch up to deal with the sales and distribution.

In the end a compromised position was taken; Red Witch continued on the programme of IP development while working with Hanser to turn sales around.

In 2013, with the launch of the Synthotron, it was clear that not only was Hanser proving to be a major disappointment, for Red Witch to manage the distribution and retail environments successfully it needed to bring on another senior staff member.

Tracey Neil was then contracted as the General Manager.  Tracey has made significant changes and provided much needed structure and processes to the company, along with a turnaround in sales. Tracey has built up improved relationships and implemented systems to better manage and support the distributors.  

Bringing Tracey on board also allowed Red Witch to start focusing on marketing. Tracey managed the successful launches of the Violetta Delay in 2013 and the Factotum in 2014.

Tracey also opened discussions with a number of new distributors, and was successful in securing Warwick in Germany, and Musical Distributors Group (MDG) in the USA.

At the same time other larger players in the music industry where approached to explore distribution options. It became apparent however that Red Witch had some admirers amongst these larger companies, who were exploring their own acquisition opportunities, particularly to strengthen their own distribution 'pipelines', by adding non-competing but complementary product lines. 

One such company to show a firm interest was Orange Music Company (based in the UK). General Manager of Orange, and the person credited with turning them into a global company, Damon Waller, recognised that Red Witch’s problems weren’t its products, its brand, or its reputation.

Subsequent to the negotiations with Orange which were not advanced, the Managing Director Damon Waller resigned his position and approached Red Witch with an offer to become the Red Witch's International Sales Agent based in the UK in December 2014, on a commission sales basis.

With the announcement of Damon’s appointment Red Witch has already seen interest from distributors around the globe. Damon is well respected in the music industry and his knowledge and contacts in the industry is what Red Witch needed to unlock new distribution arrangements.

2015: Shaking the Tree

In many ways 2015 will be a watershed year for Red Witch. Red Witch can now truly reach out globally with a suite of well respected and critically acclaimed products, and having the means to fix what was broken.

Although 2013 represents the fourth straight year of sales gains, shipments are still below the pre-financial crisis peak.
On a positive note, however, retailers and suppliers seem to have finally finished with the arduous task of recalibrating their business to the more austere climate.
The resulting stability has improved the outlook dramatically, enabling businesses to once again focus their energies on rekindling growth.
— 2014 NAMM Global Report

The worldwide music distribution business is reinventing and reinvigorating itself.

Some large dinosaurs have gone, and been replaced with younger, leaner and more passionate companies.

  • In January 2015 Red Witch appointed EFKAY as distributors in Canada, a much larger company than previous and one with a far larger dealership reach. They are both professional and passionate about what they do.
  • In February 2015 AMI replaced Red Witch's previous Australian distributor. AMI have their own chain of stores, and also work with the majority of dealers in Australia.
  • In March 2015 a distribution contract was signed with the largest music seller in China, Parsons, which has shown impressive growth over the last few years.
  • Damon Waller is currently focused on sourcing distributors in Spain, UK, Croatia, France and Italy.
  • Red Witch has two more bass pedals designed and ready for release in Sept/Oct 2015 (date TBC) for the Zeus, and Jan 2016 (date TBC) for the Bassotron.

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