Monday, July 21, 2008

Groove Attack acquires Rough Trade Germany

Long-term partnership agreement reached with arvato services

Cologne/Herne, 12 March 2008 – rough trade will return to its independent roots. Effective 1 April 2008, Groove Attack GmbH, based in Cologne, Germany, will acquire a 100% interest in rough trade Distribution GmbH, the Herne-based subsidiary of arvato services. Concurrent with this change in ownership, Groove Attack and rough trade will outsource the management of their logistics and accounts receivable to arvato services under long-term contracts. Manufacturing will be handled by Sonopress GmbH. rough trade will maintain its offices in Herne, and no jobs will be shed. rough trade Benelux will continue to operate as a subsidiary of arvato while making use of the distribution services based in Herne.

"We’re extremely happy to be teaming up with both rough trade – an excellently positioned company with many great labels – and arvato services, our desired logistics partner. With this strong alliance we’re highly motivated and well armed for the future. It will ensure flexibility, stability, and growth for our business despite the ongoing challenges faced by the music industry," says Frank Stratmann, CEO of Groove Attack. "The partnership with arvato services will guarantee that Groove Attack and rough trade can offer their labels and the retail market the best possible service." Both partners are confident that this successful partnership will breathe new life into the music industry.

Heiner Kleinekathöfer, a manager at arvato services, explains: "Groove Attack and rough trade are not just two established names in the world of independent music. They complement each other well structurally and have developed a promising joint business strategy for the future." Groove Attack will profit from rough trade’s integrated distribution structure, consisting of sales and key account management, field sales agents, and telesales, as well as a professional vendor-managed inventory system and experienced label management.

Conversely, rough trade will benefit from the successful B2B online system developed by Groove Attack. The system provides detailed information to both retailers and label partners. Valuable synergies can also be leveraged thanks to Groove Attack’s worldwide distribution network and its well-positioned digital sales outlet, GA Digital. Kleinekathöfer: "After carefully reviewing all of our options, we decided to go with Groove Attack based on these advantages." The Cologne-based music distributor prevailed over several other potential suitors.

Heino Drecker, CEO of rough trade Distribution, adds: "The merger between Groove Attack and rough trade is a groundbreaking step for the entire independent music branch. Both companies have strong traditions and a history of reliability and innovation. The unification of these strengths – along with their national and international networks – will have positive benefits for all participating partners."

[Groove Attack]

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