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HTSA Dealers Diversifying Operations

10/15/2009 04:39:06 PM Eastern

St. Louis - Members of the Home Theater Specialists of America (HTSA) are coping with the economic downturn by adding new products and services to diversify their businesses.

 Sony's Randy Meyers (far left) and Jeff Elden (far right) join David and Abie Wexler of The Little Guys at an HTSA dinner

That was the major takeaway from the biannual meeting of custom installers, which concluded today at the Ritz-Carlton Hotel, here.

After cutting costs through staff and inventory reductions, the buying group's dealers and integrators are focused on new categories like high-performance networking and LED lighting. The business extensions will help supplant slower sales, members said, and position them for a bonanza when the economy recovers.

"Everyone has had to adjust their business models to survive on less volume in this environment," HTSA executive director Richard Glikes told TWICE. "And once the economy comes back, we'll be in great shape."

Glikes described the group's 59 members as contractors that must "diversify and add more products to the mix."

 Executive director Richard Glikes presiding over this week's HTSA gathering

Among those testing new waters is St. Louis-based The Sound Room, which has added cellphone and networking systems to its repertoire, and is selling and installing solar panels through an HTSA training partnership with Sharp.

Part of the inspiration, said president David Young, is that "I get bored easily and want to try new things. But you need to change the business with the changing environment."

Young further bolstered his business by forming an informal referral partnership with other local companies — including a game room furnishings store, an interior designer, an electrical contractor and an architect — which they call The Solution Center. "We all share the same customer base, so we send customers to one another and share leads," he told attendees during a panel discussion. The one-stop team approach provides clients with expertise when skill sets are limited, and helps keep sales within the group.

 The Sound Room's David Young (far left) and HTSA executive director Richard Glikes (far right) host a panel during the group's biannual meeting.

Young is also laying the groundwork for future business by holding educational seminars for consumers and the trade, and by allowing local businesses to use his sound rooms for demos. The effort creates loyalty and establishes The Sound Room as a destination, explained consultant Joe Zanola, and, hopefully, "they will come back when they're ready to make a purchase or have a project."

Hargate Theatre Vision in Palm Springs, Calif., is similarly diversifying by adding surveillance security and lighting control, and is doing more commercial work with local resorts, to offset the downturn in second-home installations and falling TV prices. "We want to pick up new lines so we'll be in a good position when the economy returns," explained general manager Michael Dean.

For Joseph Akhtarzad, VP of Santa Monica, Calif.-based Video & Audio Center, diversification meant a new dual-store location with Southern California furniture chain Power of Home. "We share the cost of the lease and we also share the traffic that each of us draws," he said.

Audio Advice, the award-winning custom installer in Raleigh, N.C., is also adding a new location, a combination design center and showroom that will open next month within a former Tweeter store in Charlotte, N.C.

Jobs have tended to be smaller but more frequent, chairman Leon Shaw told TWICE, resulting in a net increase in business year over year. Helping to drive those new orders, said president/CEO Scott Newnam, is a search engine optimization program piloted by Audio Advice through an HTSA partnership with online marketing firm AV NetResults. "We're getting customers who wouldn't have known who we are and we're increasing our budget quarterly," he said.

Other HTSA initiatives, noted Glikes, include an email newsletter, redesigned Web site and an 84-page luxury magazine called HD Living for end users; a new search engine-optimized Web site template for use by individual HTSA members; and the creation of a charitable foundation for veterans that will provide control devices for amputees veterans wounded in Iraq and Afghanistan.

Glikes said business is still challenging for the $400 million group, although sales improved in August and traffic appears to be ramping up. Membership is down by four this year — two left the group and two closed shop — and HTSA would like to open its ranks to four or five more companies if and when appropriate, he said.

New vendor partners include Renaissance Lighting, VIP Cinema Seating, Sim2 and Panasonic's consumer division, which joins the professional products line on HTSA's dance card. At the same time, the group has parted ways with Marantz, Klipsch and Definitive Technologies, allowing it to play a larger role with a smaller base of vendors, Glikes said.

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