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Advice wanted: Taking over an HiFi Store

Keith Conroy

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Jan 23, 2021
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Dear Forum Members

I'd like to get an hear some advice.
I am based in Zurich, Switzerland. I am in my mid fifties and was recently retrenched. The past 20 years I have been the managing director of various small to medium enterprises in the high tech field including medical electronics with 100 to 250 employees. All business experience has been B2B. Educational back ground is PhD EE and MBA. I have the wonderful opportunity to re-invent myself and I am mulling over some options.

One of them is the opportunity to take over an well established Hifi Store in Zurich city. I visited the owner and his claim to fame is the ability to "match" electronics, cable and speakers. He carries the typical Swiss brands such as Piega, Neukomm, Stenheim and some other imported stuff like T&A, Rega, Cambridge: nothing really too much in the "oligarch hifi" but also nothing that the crowds here would approve of as measuring well for its cost. Fortunately, tube gear is to a minimum but of course he caters to the hipsters and sells them vinyl players.

I quick analysis shows that his long term customers are "typical audiophile", spending around U$10k per system. The current owner and his employees are believers of "you can't measure everything we can here" and unfortunately, he described an episode of switching an Ethernet router :facepalm:. While he agrees that "speaker-room interaction" is important he told me that he tames the system by swapping cables :oops:. Also, they have done barely any work on computer audio, don't understand Roon nor REW, and shy away from local streaming as they find it to complex for their customers???

I am wondering, if taking over the store (apparently by only paying off the stock) is at all useful. Of course he has long established relationships with some distributors and local manufacturers and he has a established customer base and store brand name. There are no exclusive rights for brands or territory. My worry is that I would just piss off the current customer base by teaching them too much about Toole, psycho-acoustics, room corrections, Harman curve etc. The ones agreeing would be pissed of that they spent too much in the past, the others would be pissed off at the sacrilege of believing in measurements.

Do you guys think it is worth while or should one alternatively just start from scratch?
What other factors would you consider before making such a jump?

Financially, it is not such a complicated transaction. The owner wants his "baby" to survive past his retirement and I am secure enough that I am not reliant on the store income alone.

Your thoughts are much appreciated, especially from the members who have their own brick&mortar stores.
Cheers
I have spent my working life in audio. Pro Audio, Home Audio & Car Audio. I have been a seller / Dist. /Engineer............Most of the last 20 years have been in engineering. Some of what to do, has to do with the total business cost! I would say bargain on this part of the deal. Brick & Mortar is not getting stronger as a sales channel. Here are a couple issues I see from both sides of the equation. If you don't buy the store & start from scratch they will be your competitor. Also to start from scratch it will take time to build a customer base. Remember each day a new store is open you will have fixed costs. The biggest deal I see is the fundamental direction of the current store runs against some of you audio values. If you can stand 2 fundamental different directions I would buy the store and make small incremental audio science type changes to this store. Then I would set up a 2nd sub-company using Audio Science type criteria. Make this internet only to start. You will be on a tight rope of sorts with your customer base. Since your current audio base will believe in the sonic's of AC cords........Cables etc. Many will go to their grave saying they hear differences. You will still have to sell & support this customer base! Your sub-company will take the different approach which is more Audio Science based. If your customers ask "You can say your trying to please both sides??? At some point hopefully both companies will meet in the middle on direction????????? HOPE THIS HELPS!!
 
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