Advent had to come up with an interim, quick-fix, two-piece video product that wasn't in Mitchell's plan. He and several other Advent employees locked themselves up over a weekend to get the thing designed. Since they didn't have time to develop or find sources for new compenents, they had to sue parts they knew had given them trouble in the past, and when the sets were completed, they had a greater than tolerable level of quality-control problems.
Still, Mitchell and Sprague were optimistic enough to fly to Asia to talk to manufacturers of some of the potential components of Mitchell's cream -- a videocassette recorder, a videodisc player, and four or five audio products. They played chess and talked long into the night. And everywhere they went they got a warm reception. "We really had, and still do have, access to all the technology in the world," says Mitchell.
And in spite of Advent's continuing problems, the industry thought highly of Mitchell and was optimistic about his chances for leading Advent to recovery and beyond. In July, August, and September, Mitchell and Sprague raised $3.2 million in convertible debentures, an amount they figured would fund the development of a completely redesigned one-piece TV, bring in a small stereo line, pay back outstanding short-term debts, and run the business until January, when they would again seek money.
The optimism was short-lived. A new speaker line missed sales projections by about 40% in the third quarter of 1980, and the TV problems didn't get fixed. Profitability proved as elusive as ever. In October Mitchell went to Sprague for more money.
"We had just handed him $3.2 million," says Sprague, "which was $1.2 million more than he wanted, and he comes back four weeks later and asks the same bunch of guys to go out and sell the same line over again. It was an outrageous request."
Though events plainly weren't unfolding according to anybody's plan, neither Sprague nor Mitchell nor the board demanded that the company retrench or stopped to reconsider their plans. Sprague was in England on Aston Martin business, Mitchell was convinced that his whole package was essential, that nothing could be cut without losing credibility, and the board simply nodded their heads.
By December, Advent didn't have many orders. "We had three factories, a big interest rate, and lots and lots of expenses, and nothing in the line was generating a profit," says Mitchell.
In January 1981, when Mitchell had hoped to raise more money, Advent had very little to sell. Despite all promises, it was losing $500,000 a month. The board authorized the sale of $1.5 million of convertible subordinated debentures, but no one would buy them. And it was then that suppliers and retailers began to realize that Mitchell's vision might not be enough to turn the long-struggling company around.
"The dream was irrelevant," says Stan Penton, chairman of the creditors' committee and president of Northeast Machine Co. Inc., a Waltham, Mass., manufacturer. "The problem was not the strategy of Advent for the '80s," agrees Sprague. "The fact of the matter is we didn't sell 20,000 speakers and 500 TVs."
Advent is still operating today, and its executive offices are in one of the same old brick factory buildings near MIT that Kloss leased. A narrow stairway leads to a door marked Advent, and then to an open reception area with worn carpet, a receptionist, and a floor-to-ceiling blowup of a Stereo Review article on Advent speakers. A small stereo system, the Response Line that Mitchell had hoped to bring out this spring, is on top of a filing cabinet, broadcasting a news report about a car accident.
Mitchell walks out of his office and goes down the stairs to Advent's video room, where he used to bring visiting salesmen. He would stand them next to a butcher block table with a lamp and a crystal ashtray on it, and chitchat. He would talk until they grew impatient enough to say, "Damn it, Bernie, why did you bring us down here?" Then he would take the lamp and the ashtray from the table, set them on the floor, and flip up the tabletop. The back of the top was a 50-inch TV screen.
Today there aren't any jokes. He walks around the room, past the troublesome TVs, and stops in front of a Response Line system."Simple. Elegant. Excellent," he says, and then mumbles something about these products never seeing the light of day.
In early July, Advent's creditors' committee recommended approval of a reorganization plan proposed by Sprague, Nolan Bushnell (founder of Atari and Pizza Time Theatre, former Advent director, and Sprague's friend), and Alan Trustman, a Boston investor, lawyer, and screenwriter who wrote the screenplays for Bullitt and The Thomas Crown Affair, among other things. The group is putting up a total of $2.6 million. They're offering to pay 40? cash on the dollar for claims less than $1,000 and 40? on the dollar in installments for unsecured larger claims. Stockholders will retain their stock. (Stock at this writing was trading at 7 3/8.) Bushnell would put up the largest chunk of the money, about $1.6 million. Sprague and Trustman would each put up nearly half a million. Trustman is now acting chief executive officer and chairman of the board. As this article went to press, the plan had yet to be approved by the court, but no one else has offered any alternatives. If the plan is approved, Advent would come out of Chapter 11 and take a more modest approach to the audio/video revolutionary dream.
"It's a tragedy," says Roger Howe, chairman of U.S. Precision Lens. "They've missed their window. Advent missed taking advantage of its early lead. It's sick company with a lot of competitors instead of a sick company with no competitors. Other companies are going to enjoy the benefits of its pioneering."
