The rise and fall of the stylish 1960s hi-fi manufacturer that launched the career of Peter Munk.
Hef had one. Old Blue Eyes promoted them. Units provided decor for iconic films like The Graduate. Top American department stores carried them. For a time in the mid-1960s, the coolest upscale hi-fi equipment in North America was produced by a Toronto firm whose innovative units attracted sound connoisseurs and design mavens alike. Yet, despite launching the career of one of Canada’s major businessmen and the cachet it brought to Canadian manufacturing design, Clairtone’s fortunes crashed as quickly as they rose.
The Clairtone story began when Peter Munk, a Hungarian émigré trained as an engineer at the University of Toronto, and David Gilmour, the son of a director of the Nesbitt Thomson investment house, met during the 1950s. Their strengths complemented each other: “David can smell a product and Peter can make it commercially viable,” future business partner Bill Burchill noted. “David might not understand how you get to a bottom line, but he always keeps it in focus while he’s conceiving a product.”
Munk was running a firm specializing in installing hi-fi equipment in wealthy Toronto homes when Gilmour suggested they should launch their own line of sets, which would merge top-of-the-line quality electronics with trendy Scandinavian furniture design. In 1958, they built a test unit to display in a store Gilmour’s sister Shelagh ran on Bloor Street. Dubbing their new venture Clairtone, Munk and Gilmour rented a room in the Park Plaza Hotel that September to demonstrate two models to 17 buyers from local retailers ranging from Bay Bloor Radio to Simpson’s. All 17 placed orders, despite the stiff recommended retail price tag of $695, double the going rate for similar sets.
Clairtone was an instant success, impressing buyers from appliance shops, equipment dealers, and department stores across North America. Munk sensed they arrived on the market at the right time, just as stereo records gained popularity and Scandinavian furniture was in vogue. Their flair was recognized in early 1959 through an award from the National Industrial Design Council and feature articles in publications like Canadian Homes and Gardens and the Financial Post. Rival manufacturers tried to emulate Clairtone designs. But early success came at a cost, as Clairtone was perpetually short on cash. “The more orders we got,” Gilmour later observed, “the more inventory we had to create, the more credit we had to provide for our dealers, and the more capital it required. The banks were reluctant to help us because we were small and unknown, and we were a start-up situation.” Both partners mortgaged their homes, and took the firm public in April 1960.
How hot was Clairtone? Annual sales grew from $642,000 during its first full year of operation in 1959 to $8.9 million in 1963. Share prices rose from $2.75 during the IPO to $12 by the spring of 1961. Simpson’s at Queen and Yonge reported selling one unit every three hours despite the price tag. Models graced the floors of prestigious American department stores like Bloomingdale’s in New York and Marshall Field’s in Chicago. Dealers reported they didn’t even have to plug demonstration units in to move them. A furniture manufacturer in Strathroy, Ontario was purchased to produce set cabinets. From its initial quarters near Keele and Lawrence, Clairtone moved into a large head office and assembly plant at 100 Ronson Drive alongside Highway 401 in Etobicoke in June 1962, where the opening day dignitaries included federal trade minister George Hees and Toronto mayor Nathan Phillips.
Aiding Clairtone’s rising profile was an innovative advertising campaign designed by Dalton Camp. Launched in early 1960, the print spots went beyond highlighting the quality of the units and their Canadian craftsmanship. They played upon the youthful bravado of Munk and Gilmour, who Camp saw as charismatic personalities Clairtone’s identity would be built around. The campaign also built on the line’s cachet with musicians, using customers like Oscar Peterson and Frank Sinatra as pitchmen.
Image was important to building the Clairtone mystique. Beyond high quality and higher prices, the company portrayed its products as a gateway to living the good life. Early on, Gilmour suggested marketing them not just to the usual male hi-fi nuts, but to women who would treat them as home furnishings. Besides the usual instructions, the owner’s manual offered entertainment tips. One unit’s guide offered suggestions on throwing a dance party, complete with cocktail recommendations and dance moves from Munk and Gilmour. One ad offered potential customers a booklet modestly titled “The Intelligent Man’s Guide to Buying Stereo.”
In late 1962 designer Hugh Spencer issued a challenge to Clairtone’s engineers:
I want you to imagine that you are visitors from Mars and that you have never seen a Canadian living room, let alone a hi-fi set. What are the features that, regardless of design considerations, you would like to see incorporated in a new hi-fi set?
The result was Project G, a long wooden box flanked by black globe-shaped speakers at either end. The unit used transistors instead of traditional tubes, which eliminated the need for a ventilated cabinet. Launched in 1964, it won a silver medal at that year’s Triennale di Milano exhibition. Advertising promoted it as a “sound sculpture” and employed top photographer Irving Penn to shoot the unit as if it were a fashion model. It was also marketed through appearances in films starring Sinatra (Marriage on the Rocks), Tony Bennett (The Oscar), and Sonny and Cher (Good Times). Playboy chief Hugh Hefner acquired one and promoted it in his magazine. Despite retailing for up to $1,850 and a production run of around 500 units, the Project G quickly symbolized bachelor-pad cool among design buffs and interior decorators. “Clairtone’s cabinet unit defined not only technical innovation but created a true statement piece for lounges, sitting rooms, dens, and studies across North America,” Monocle’s Tyler Brûlé observed years later. “In many ways, Clairtone’s Project G was a perfect expression of Canada’s modern spirit in the run-up to Expo ’67 in Montreal.”
A smaller and more affordable version, the G2, debuted in 1966. Its futuristic, sexy appeal was epitomized by its placement in the Sean Connery flick A Fine Madness, where the star engaged in a love scene next to a G2 under a model of a satellite, and in The Graduate, where one sits in the background as Anne Bancroft’s Mrs. Robinson seduces Dustin Hoffman.
As Project G launched, Clairtone executives realized the company was large enough to manufacture its own electronic assemblies instead of outsourcing them. Visions grew of an integrated factory to assemble cabinets and electronics under a single roof. Discussions began with Industrial Estates Limited (IEL), an agency established under Nova Scotia premier Robert Stanfield to draw manufacturers to the province. In November 1964, an agreement was reached where IEL would provide working capital and build a 250,000-square-foot plant for Clairtone near Stellarton, while the provincial government would offer tax breaks and training grants. The Etobicoke facility would remain as a sales and service centre.
When the new plant opened on June 21, 1966, Munk made a pledge to Stanfield: “Sir, we will not let you down! We shall be at the forefront of your industrial revolution!” To outsiders, the hoopla confirmed how far the Clairtone had come in less than a decade. Inside, there were concerns among IEL officials about the company’s finances (not helped by a short-lived venture, Canadian Motor Industries, which proposed to manufacture and distribute Japanese cars) and the extravagant spending surrounding the plant opening, including a luxury train ride which brought dealers and dignitaries from Toronto.
Munk later regretted the IEL deal:
The combination of our greed and their willingness to hand out money made us too big and we could not cope with it. With the grants, we way overbuilt. This left the company short of cash and vulnerable when sales did not meet expectations. When you deal with government, the normal business criteria don’t apply any more.
A fatal mistake was introducing a line of television sets. While set production was announced with the move to Nova Scotia, it was forced onto Clairtone when IEL made building colour TVs a condition for providing a $3-million advance in 1965. There were also reports of dealers demanding Clairtone enter the colour TV market when they faced pressure to dump Clairtone stereos by TV manufacturers who wanted to push their own hi-fi equipment. Though the sets were promoted as heavily as the Project G line, including their use in Chatelaine magazine’s model home display at Expo ’67, they hit shelves during a television sales slump in late 1966 and early 1967.
There were also problems with the plant. Two unions fought over worker representation. Rough roads damaged products. Stereo components took weeks to arrive. A new manager nearly provoked a worker rebellion. The company’s high quality-control standards deteriorated, as IEL demanded a production increase.
As Clairtone’s finances worsened, IEL increased its control via share purchases and loans. Relations between IEL and the founding partners deteriorated after Stanfield decided to pursue the federal Progressive Conservative leadership in 1967. His eventual replacement as premier, provincial finance minister George Issac Smith, had an icy relationship with Munk. The root of their loathing stemmed from a business trip to San Francisco in 1965, where Munk criticized Smith for being a boring speaker. During an August 27, 1967 board meeting, Munk and Gilmour were forced to accept terms dictated by Smith, which forced them to cede control of Clairtone to IEL in order to receive a $2-million grant. The founding partner saw one last chance to retain their hold by arranging a takeover deal with sewing machine manufacturer Singer, but that fell through.
After IEL officially took over in October 1967, Munk and Gilmour stayed on as directors. They were not greeted warmly by new management. When Munk returned from a European skiing trip in March 1968, he found the new CEO in his old office. Munk’s files were stacked on a desk in a smaller office a few doors down. The founding partners soon severed their ties with Clairtone, thanks to 18-month contracts signed in August 1968 that reduced them to mere consultants. Munk and Gilmour continued their business partnership, which would stretch from property development in Fiji to Barrick Gold.
Clairtone’s demise rolled along. The company’s high-end cachet fell quickly, culminating in its products being used as contest prizes for Loblaws shoppers. Production fell at Stellarton, resulting in layoffs. IEL halted Clairtone production in 1970, but kept the plant going to produce private brand products for department stores. While 2,000 jobs were promised when the facility opened in 1966, only 40 workers were on the line by the end 1970. IEL soon foreclosed on the property.
Despite its messy ending, Clairtone retains a soft spot in Munk’s heart. “Clairtone was his first company, his ‘first love,’ he once called it nostalgically,” his daughter Nina observed. “Measured coldly in dollars and cents, it was his smallest and least successful company; yet nothing my father has done since then has affected him the way Clairtone did.” At a reunion of former Clairtone employees at the Park Plaza in 1989, Munk reflected that “[e]verything I’ve been able to achieve afterwards is because of Clairtone. The biggest thing I got from the whole experience is self-confidence. I can achieve anything I set my mind to. We learned the impossible is attainable.”
Additional material from Made in Canada: Craft and Design in the Sixties, Alan C. Elder, editor (Kingston: McGill-Queen’s University Press, 2005); The Art of Clairtone by Nina Munk and Rachel Gotlieb (Toronto: McClelland & Stewart, 2008); Golden Phoenix by Richard Rohmer (Toronto: Key Porter Books, 1997); Peter Munk: The Making of a Modern Tycoon by Donald Rumball (Toronto: Stoddart, 1996); Stanfield by Geoffrey Stevens (Toronto: McClelland and Stewart, 1973); the October 10, 1963 edition of the Globe and Mail; the November 19, 1964 edition of the Halifax Chronicle-Herald; and the October 3, 1967 edition of the Toronto Star.