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Imation is banking on consumer sales
The Oakdale-based manufacturer is fighting a decline in its commercial tape business with a digital electronics line focused on a new audience.
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After suffering brutal knocks last year when several of its Wall Street bank customers collapsed, Imation Corp. hopes to attract mainstream customers with digital electronic products aimed at females and young adults.
Imation, the Oakdale-based manufacturer best known for recordable corporate data tapes, flash drives, CDs and DVDs, unveiled more than 10 new products Wednesday at the 2009 International Consumer Electronics Show in Las Vegas.
The products, which feature Imation's Memorex and TDK brands and its budding relationship with Apple's ubiquitous iPod, include new portable hard drives, digital picture frames, a wireless digital projector, touch media players, home-theater accessories and Memorex iPod audio systems for CDs, clock radios and speakers. Some of the technology works with Apple's iPhone 3G.
The strategy shift follows a shakeout in banking, which killed tape orders and moved Imation to cut 200 jobs, incurring a $40 million charge. The company has missed its own earnings projections for the last two quarters. Last week, CEO Frank Russomanno cited the sagging economy and snipped fourth-quarter expectations.
Going forward, Jeff Meredith, executive director of Imation consumer marketing, said the company is on track to transform into a brand-based marketer of both consumer and commercial goods.
The company recently spent six months and about $5 million on the new products. Magazine ads have run in O, People, Us Weekly, Domino and other publications. The company has made strategic product giveaways for audiences of "The View" and "The Ellen Show." Now the products are hitting Vegas.
Last year, Imation hit the consumer electronics show with a line of youth-oriented electronics gear featuring SpongeBob SquarePants, Dora the Explorer and other Nickelodeon characters. Meredith said this year's product line aims at young adults, females and home decorators looking for gadgets that match home decors.
Also significant is Imation's budding relationship with Apple. It blossomed with Imation's September acquisition of XtremeMac, which makes accessories for the Apple iPod, such as a new iPod Nano docking station that lets users digitally record meetings and class lectures.
Imation once sold mostly to corporations, but that's changing with acquisitions in the past few years of brands such as Memorex, TDK and Memcorp.
"Now, from a corporate perspective, more than 50 percent of our sales are done out of our consumer business," Meredith said. "And 10 percent of our sales are now in the consumer-electronics space. That is a significant change for us over the past few years."
Imation does just over $2 billion in annual sales. Analysts said it remains to be seen if the push toward consumer goods can help at a time in which consumers and corporations are scaling back purchases.
Investors seem to be sitting on the fence. Imation stock closed Friday at $12.99, down from its high of $27.63 a share 11 months ago.
Dee DePass • 612-673-7725
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