Image Inks Sonopress Distribution Deal4 Apr, 2007 By: Erik Gruenwedel
In a move that is expected to cut $2 million in expenses, Image Entertainment April 4 announced it had signed a distribution deal with its DVD/CD replication company Sonopress LLC, a division of German media giant Bertlesmann.
As a result of the deal, Chatsworth, Calif.-based Image will shutter its Las Vegas distribution facility with plans to sublease the facility for the remainder of its 67-month operating lease.
In addition to disc replication, the 535,000-square foot Sonopress facility in Pleasant Prairie, Wis., will create in-store displays and price labeling for both standard and vendor managed inventory (VMI) shipments, including Wal-Mart and Target.
Last summer, Image signed a five-year, 75 million disc replication deal with Sonopress, which agreed to give Image an interest-free $10 million advance that would be repaid at 20 cents per manufactured disc plus a 4.2-cent administrative fee per disc, according to a filing with the Securities and Exchange Commission.
“Having Sonopress provide distribution services in addition to the replication of our product is a critical step in Image's strategy to increase customer service levels, expand operational capabilities, eliminate limitations on growth and reduce costs,” said Image COO David Borshell. “The further integration of Sonopress into our supply chain process — from replication to retail store delivery — will take Image's distribution offerings to new and higher levels.”