Industry News

Thiel: the Final Chapter

At Copper, we’ve followed the slow-motion demise of Thiel Audio for almost two years. As we’ve mentioned before (perhaps ad nauseam), the company of that name whose junk/assets are now being auctioned off is not the same as the company  founded in 1976 by Jim Thiel, his brother Tom, and Kathy Gornik. The company whose affairs are now being thrashed out in the United States Bankruptcy Court for the Middle District of Tennessee was the resultant of a Nashville private equity firm buying the Real Deal Thiel in 2012. Hopes were high that Thiel’s heritage of unique designs, bespoke drivers, and beautiful cabinetry would be preserved and nurtured with an infusion of capital.

Sadly, that was not the case. In short order Thiel’s woodworking facility and incredible stock of veneers and hardwood solids were dismantled and sold off, and the company’s HQ was moved from Lexington, Kentucky, to Nashville. There were bold statements about a new factory being built there; that never came to pass. Eventually, a line of rather nondescript products were shown, using off-the-shelf drivers, Chinese cabinets, and featuring none of the traditional Thiel design elements.

A succession of five CEOs, none of whom came from the audio biz, passed through the company during its five-ish years of operation. I was bitterly amused to see that the company’s final CEO, Elyse McKenna, is now a mortgage loan originator in Nashville.

All the stages of the company’s decline have been faithfully and factually reported by Ted Green on his Strata-gee.com website. Many thanks to Ted, one of the few reliable sources of info on the business end of the audio business.

Ted’s story on the Bankruptcy auction is here.

Rather than link the reader back through our succession of stories on Thiel, excerpts follow below. There is some concomitant duplication of links.

RIP, Thiel Audio.

Copper #40  8/28/17:

Thiel Audio: For many observers of the audio industry, few things have been as painful to watch as the de-evolution of Thiel Audio following the death of founder and designer Jim Thiel and the sale of the company by Jim’s partner, Kathy Gornik. The company was built upon Jim’s unique drivers and alignments and his brother Tom’s exquisite cabinet-work; in recent years the company divested itself of all machinery and facilities in Lexington, Kentucky, meaning that the company could no longer repair or refurbish legacy models. [As we later learned, this was not the case. Longtime Thiel employee Rob Gillum continues repairing and updating vintage Thiel speakers, as detailed in the excerpt below from Copper #52—Ed.]  As incredible customer support had always been an earmark of the brand, that did not bode well.

It recent years the company has offered fairly conventional speaker designs, apparently made in China [ I’ve since been told enclosures may well have been made in Indonesia, with at least some assembly occurring in Tennessee.—Ed.] A number of sales managers have come and gone, and the company just announced its fifth CEO in four years. The new CEO is Elyse McKenna, a Twitter-savvy veteran of artist agencies and web-marketing companies. We wish her and the company well, but the name Thiel has little meaning for audiophiles these days.

Copper #51  1/29/18:

For Thiel, the end has come—or, as Ted Green bluntly put it in his Strata-gee newsletter, “Thiel is toast“.  The company struggled following the death of designer/cofounder/namesake Jim Thiel in 2009, and following the sale of the company by cofounder Kathy Gornik in 2012, the company of legend went away, piece by piece: unique topologies, custom drivers, bespoke woodwork—all disappeared, replaced by generic off-shored products and ultimately, a small Bluetooth speaker. Five CEOs in five years couldn’t have helped.

Even if you didn’t love the sound of Thiel speakers, you had to admire the company. Jim was a kind, patient man with a brilliant analytical mind, and was capable of articulating his ideas better than any engineer I’ve ever known. His brother Tom left the company years ago, but was responsible for the company’s legacy of amazing cabinetry and inventory of exquisite woods and veneers. Kathy, cofounder and Jim’s partner, was a savvy, driven businessperson who kickstarted sales by driving a speaker-filled station wagon all over the country. As one of the few female company heads in consumer electronics (much less in the little world of the high end), Kathy was constantly scrutinized and recruited for leadership roles in all manner of organizations. I’m proud to say she was one of my mentors.

Anyway: gone. All gone.

Copper #52  2/12/18:

In Copper #51 we wrote about the demise of Thiel Audio. The reality of the situation was that the Thiel that was important to audiophiles and music lovers, died long ago. The company that recently went out of business merely carried a familiar name.

There is good news coming out of that demise, however. The service department of Thiel was the only part of the “real Thiel” that still remained in existence, and it has been run by Rob Gillum, who started with Thiel in 1981. Gillum recently purchased the service department, parts, materials and all, from Thiel. The thousands of Thiel speakers out in the world can be maintained, repaired and updated—Gillum is working on what he calls “hot rod” kits to upgrade the performance of old models—by the leading expert in the field.

Our friend Ted Green at the Strata-gee newsletter delivered the full story here. A website for the new/old venture, Coherent Source Service, can be found here. 

Copper #72  11/19/18:

Chapter 7 filings are seldom happy endings; rarely does any creditor receive enough of what they’re owed to make them happy. In the case of Thiel Audio, it’s just the last stop in a long string of indignities for a once-storied audiophile speaker brand. Back in Copper #51, Industry News looked at the shutdown of Thiel and pontificated, “…gone. All gone.”

That was premature: now, with the filing of Chapter 7, it could be said that Thiel is going, going…

The actual bankruptcy filing can be read here, and is alternately horrifying and fascinating. Assets are listed as about a half mil in furnishings and artwork, along with several hundred thousand in inventory. Both numbers seem, to be charitable, hard to believe. The biggest creditor is Chinese speaker OEM Meiloon, owed $1.6 million; industry insiders who have worked with Meiloon have expressed astonishment at that number, given the company’s normally-tight terms.

It will be interesting to see how this plays out. One hopes the Thiel name won’t be added to the likes of Acoustic Research, Advent, and other once-great brands, as a brand name misapplied to cheap accessories sold at Best Buy or Amazon.

[Thanks to longtime Thiel employee Gary Dayton for helping fact-check all this material—Ed.]