Accessories Adding Up

A large Dutch electronics company has set its sights on a rapidly growing Charleston-based outfit that makes iPod cases and other digital-device accessories.

Amsterdam-based Royal Philips Electronics on Friday said it plans to buy Digital Lifestyle Outfitters for an undisclosed amount, subject to regulatory approval. The deal is expected to close by June 30.

Digital Lifestyle Outfitter's corporate headquarters are in downtown Charleston, but most of its products are made in Asia. It also has a warehouse in Raleigh, where the company was founded in 2001. Founder and chief executive Jeff Grady moved the headquarters to Charleston in 2004. The company employs about 60 people.

In a statement, he said the deal would allow his company to expand internationally and "capitalize on Philips' global distribution network with key retailers." Once the deal is finalized, Grady will become head of a Philips' division to be based in Charleston. He was out of the country Friday and could not be reached for comment.

Philips said the acquisition of Digital Lifestyle Outfitters would beef up its consumer electronics accessories division, which sells products such as headphones and cables. "Peripherals and accessories are among the fastest growing and higher-margin product categories in consumer electroncs today," the company said.

In particular, Digital Lifestyle Outfitters will add more "mobility" products - or those for mobile devices such as phones and digital music players - to Philips' accessories line-up, the company said. Going forward, Grady will oversee the mobility division of Philips' peripherals and accessories unit.

Ernest Andrade, head of the city's Digital Corridor technology initiative, hailed the deal as another milestone for Charleston's 'knowledge economy.' "This investment by an international blue chip company represents the third substantial investment in Charleston's knowledge economy in as many months," he said.

Other recent notable tech deals in the area include a Silicon Valley venture capital firm's $60 million investment in Automated Trading Desk, a Mount Pleasant-based stock-trading company, and a private equity firm's investment in BenefitFocus.com, a specialty software maker on Daniel Island. Also, Internet giant Google this month announced plans to open a $600 million, 200-worker data center near Goose Creek. Andrade predicted that outside investment in other local technology-related companies would accelerate in the coming years.

Grady, an Internet industry veteran, launched Digital Lifestyle Outfitters in 2001 after buying one of the earliest versions of Apple Inc.'s iPod, a digital music player. He was smitten by the portable device, but was disappointed to learn it had no carrying case, no runner's belt, no speakers and no way to connect to a car's sound system. From there, a business plan and a 150-piece product line was launched. Over the years, Digital Lifestyle Outfitters created dozens of additional products and gained major wholesale customers including Apple, Best Buy and CompUSA. Merchandise ranges from FM transmitters that let music fans link digital players to car sound systems to power packs for recharging portable devices.

Last year, Digital Lifestyle Outfitters raked in about $100 million in sales. It's now the among fastest-growing privately held companies in the United States, according to Andrade.