OPENING-HEADSHOTWhen one thinks about iconic music products companies with deep roots in the United States, Peavey Electronics comes to mind almost immediately. Already having marked 50 years, and boasting a peerless portfolio of patents, Peavey’s place among the legendary names of MI is secure. Nevertheless, in recent years, the company’s decision to move substantial manufacturing overseas has generated controversy, stirring criticism among some dealers and players. In this frank, forthright interview, Courtland Gray, Chief Operating Officer, Peavey Electronics, tackles that subject head on, while also reflecting on his own musical history, discussing Peavey’s estimable legacy, offering advice to brick-and-mortar dealers and alluding to innovative new Peavey products that are just around the corner.

This thoughtful interview is liable to generate some water-cooler chatter. Don’t miss it.

The Music & Sound Retailer: Let’s begin with your personal background. Trace your own history with music making, musical instruments and pro audio gear. Touch on what initially captured your interest. During your earliest years, what steps did you take to pursue that initial interest?

Courtland Gray: I was an eight-track record junkie, always listening to music in my youngest years. My initial exposure to instruments came through our school program. I might remember how to play “Old Smokey” on the recorder if you challenged me. “Hot Cross Buns,” not a problem. I really wish I had more exposure in my elementary years, but I had older friends who didn’t like the teacher. That influenced me to have a somewhat negative vibe on the music program in school…or more so toward Mrs. Hensley. Funny that she is one of the few teachers I remember from school….

I think music education is a basic necessity in public education. I know NAMM does what they can to promote it, but every music store really needs to hit local school districts to support music and arts education in our public schools. Unfortunately, my guitar lessons were not exciting, because my parents wanted me to learn jazz licks and all I wanted to do was jam rock chords with the radio. So, my enthusiasm was short lived and I put down the guitar. My bongo playing is suspect.

The Retailer: Describe your career progression, starting with the beginning of your journey and leading us right up to your current role as Chief Operating Officer of Peavey.

Gray: When I graduated from SMU, I really wanted to get into the music industry on the recording side. I was able to get an interview with Jim Ed Norman, who was head of Warner Brothers in Nashville. When I was offered the mailroom position, where folks like David Geffen got their start, I was underwhelmed. I thought it would be easier to get in the business, but it’s never easy. I should have taken the job. I went to Colorado and sold real estate in Telluride and DJ’d at the public radio station…The Cold Grey Dawn show from 6am to 10am. I’d play Sinatra, to Hendrix, to some New Age music, to New Riders of the Purple Sage. It made waking up interesting for people, if they didn’t change stations.

After that, I was in Scottsdale AZ for a few years, and I worked part time for a company that did satellite uplink for news, talk shows and sports games. We did the national broadcast for the Lakers, Suns, Rockets and more, plus a number of late-night talk shows. Those were fun if you could keep focused on your game, but I was usually doing more than one and I was hard pressed to get all the cues on time. I think some advertisers were shortchanged.

The Peavey-themed OCC Chopper and Custom Shop guitar, made famous on “American Chopper,” in the gear showcase at Peavey’s international headquarters.

The Peavey-themed OCC Chopper and Custom Shop guitar, made famous on “American Chopper,” in the gear showcase at Peavey’s international headquarters.

The Retailer: Now, let’s turn to Peavey Electronics. Given the company’s stature in the music products market, most of our readers know how Hartley created the company, and they’re familiar with the changes over the years. What are some things about Peavey’s history, development and evolution that most people don’t know?

Gray: I think there are a lot of things that people don’t know about Peavey and about what Hartley has contributed over the last 51 years. We have a phenomenal history, and the company will be placing more focus on telling the story the way it should be told. We were the first company to use CNC automation to make guitars. We created one of the first powered mixers. We were the first company to break the dollar-per-watt barrier with power amplifiers. We revolutionized the audio industry with the world’s first computer-based audio processing and control system, MediaMatrix. (With more than 10,000 installations, it is still the world standard today.) Peavey is the only music company to have more than 200 patents attributed to it over the last 51 years. Peavey has made a difference in the lives of many, many people, and it has given people the opportunity to develop their dreams of making music.

The Retailer: Peavey Electronics is a company whose product portfolio is quite broad. It encompasses amplifiers, of course, but also electric and acoustic guitars, microphones, mixers, speakers, accessories and more. Which categories were particularly strong for the company in 2015? Which categories could use improvement? What do you foresee in this regard for the second half of the year?

Gray: Yes, Peavey makes many, many products. The market is always changing, and the fact that we made damn near everything in the audio chain is something that kept us strong all these years. Fads are fads, but we make everything you really need. Nevertheless, there comes a time when you need to rationalize what you do and what you’re trying to sell, while being mindful of the market. There is a place and a buyer for every product we make. That’s what we keep in mind whenever we bring something to market. This year, we’ve launched some of the best sound-reinforcement products anyone has had for many years. I’ll put our MI gear against any other company and be confident Peavey will come out on top. We need more musicians to give them a listen.

The Retailer: For a period of several months, we saw a lot of press releases about Peavey inking deals for officially licensed products: Major League Baseball, Marvel, “Star Wars,” “The Walking Dead,” etc. Were those relationships successful, sales-wise? Will they continue? How do these officially licensed products fit into Peavey’s product portfolio and your overall brand?

Gray: Yes, we were on a roll gathering licenses. In hindsight, some turned out to be marginal at best, and profitability was disappointing. You pay them and guarantee them annual minimum royalties; then, you market and promote their brand while taking on all the supply and retail issues. I let most expire at the end of last year, and we will only continue with the most successful.

The Retailer: About 18 months ago, the industry was buzzing about Peavey Electronics’ choice to shift a lot of your manufacturing overseas, even as the company has maintained custom and high-end product production at your Meridian MS factory. Describe the “state of the union” of American manufacturing in the MI industry. What are the realities? How are things likely to change, if at all?

Peavey Electronics’ international headquarters, in Meridian MS

Peavey Electronics’ international headquarters, in Meridian MS

Gray: Peavey has always been held to a different and higher standard as it relates to manufacturing. No other company in our industry invested as much in manufacturing over the years as Peavey. None. From our perspective, we could not compete while making all our products in the U.S. Virtually all our competitors source in China, Mexico, Brazil, etc. Believe me…we have invested millions trying to keep as much as we can here in the U.S. But then, you take a look at the continually rising costs and risks of making things in the U.S. The FCC, the EPA, the rising cost of healthcare, state and federal regulations, and tax policies all play a big part in the decision-making process. Unfortunately, today, the U.S. is not a friendly nation for manufacturing. This is an election year, and we hear a lot of rhetoric and sound bites about bringing home manufacturing to the U.S. Well, great! Where have you been for the last decade? I don’t think tariffs on overseas goods will do the economy much good, considering everything else everyone buys (not just music and sound equipment) comes from overseas. That said, we continue to manufacture Composite Acoustics guitars here, as well as various amps and speaker enclosures. We also do our custom production here, and our most advanced technology products, such as MediaMatrix, continue to be made in the United States.

The Retailer: When you look at Peavey Electronics as it currently exists, what would you say you’re the proudest of? What makes the company stand apart not only from its direct competitors, but also from companies in the broader MI industry? What’s the “secret sauce” at Peavey?

Gray: I’m grateful to be part of an organization that continues to bring products to so many artists and creative people. For more than 50 years, Peavey has brought great products to musicians, and it has exposed people all around the world to great audio. While we certainly provide high-end, expensive products, it has always been central to our focus to provide quality, affordable products to everyone who wants to play music. This continues to be our differentiation today, and I believe this sets us apart from many of our competitors. We were recognized by the U.S. Commerce Department by receiving the E-Star Award for excellence in export, distributing to more than 136 countries around the world. We hear stories all the time from friends and fans who see Peavey equipment in obscure foreign locations. It’s a testament to the quality, durability and support Peavey provides to its distributors and customers around the world.

The Retailer: What continues to keep you motivated, excited and engaged about working with Peavey and within the MI industry? What makes you eager to get out of bed in the morning and go to the office?

Gray: I truly appreciate the opportunity that Hartley, and Peavey as an entity, has given me to make a difference in people’s lives. There are many families around the world that look to Peavey for their well-being. It’s not always an easy task to make sure everyone is getting all they need, but I try to see that our customers and dealers are satisfied and proud to represent the Peavey brand.

A Peavey employee puts the finishing touches on a Peavey Composite Acoustics guitar.

A Peavey employee puts the finishing touches on a Peavey Composite Acoustics guitar.

The Retailer: Discuss Peavey’s commitment to the brick-and-mortar MI store channel. Is working collaboratively with brick-and-mortar music dealers a key, unchanging part of Peavey’s fundamental approach to doing business? Expound on Peavey’s dealer-focused philosophy.

Gray: Peavey remains the biggest supporter of brick-and-mortar retailers in the industry. Forget that, at one time, Hartley said he’d never make products in China or sell to chain stores or catalogs. We still hear dealers talk about that, but no other company held out as long as Peavey did to support the independent dealer. Retailing has changed so dramatically over the last few years, and it continues to do so at an extraordinary pace. What’s next? Who knows! But the way we all do business will continue to evolve.

The Retailer: Is there anything the dealer channel could do that would be helpful to Peavey Electronics as a company? Do you have any suggestions for the dealer channel that you believe would be helpful to retailers, in addition to being helpful to your company’s bottom line?

Gray: Buy more Peavey! Be proactive in seeking customers and supporting them. Know what they are interested in, and learn how to satisfy them and keep them loyal. Don’t try to stock every brand! Focus on known brands like Peavey, which can fill your store with very competitive product lines. Look like a store that stands behind a brand. Peavey is here to be a partner for your business.

The Retailer: Peavey Electronics has been around since 1965—that’s 51 years. What does the future hold for Peavey? What can company-watchers expect to see?

Gray: You will see Peavey become a more focused operation to build on our legacy of first and cutting-edge products. You should see what’s in the hopper today! Our competitive advantage remains our legacy of innovative products and a 50-plus-year heritage as a great, family-owned U.S. music and audio products manufacturer. But it’s the trust from our dealers and our customers that really gives Peavey its power as a brand…a time-honored and earned legacy from players who have enjoyed those innovative products. We’re going the extra mile every day to sustain that trust. That’s what gets me up every morning.

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