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Scottsdale 1st Stop In Starpower’s Expansion

4/07/2008 02:00:00 AM Eastern

Dallas – Starpower, the local A/V chain known for its luxury installations and celebrity clientele, is embarking on a multi-regional expansion that could eventually take the company nationwide.

The first stop in its multi-year expansion is Scottsdale, Ariz., where the privately-held independent plans to open a 10,000-square-foot facility in November. The store, located in the The Shops at Chauncey Ranch, will be comprised of a 6,000-square-foot showroom and a 4,000-square-foot custom installation center and supplied from standalone warehouse. The site will be the company’s fourth store, and its first outside the Dallas-Ft. Worth metroplex, although its custom install teams already travel well beyond Starpower’s geography to service select customers.

The expansion plans were long in the making, noted CEO and co-principal David Pidgeon, who culled the resources of the University of North Texas (UNT), Savitz Research Cos., and Starpower’s board of directors. The latter, said chairman/CFO Daniel Pidgeon, David’s brother and business partner, includes a former CEO of Victoria’s Secret and a past chief marketing officer of 7-Eleven, both locally-based businessmen.

UNT and Savitz identified upwards of 200 locations nationwide where Starpower’s hi-level service model would find a ready audience, David said. The list will be limited initially to Sunbelt and coastal communities that mirror the Dallas market and lifestyle, and that can support a single store. Indeed, the company’s custom install focus can sustain a lone location, the brothers said, unlike high-volume stack-and-sell retailers that must backfill a market to rationalize distribution and advertising costs.

More important, said Daniel, the company can grow at its own pace. Since the Pidgeon family holds a majority interest in Starpower, “We’re not slaves to investors and don’t have to hit certain growth plateaus,” he said. Its outside backers also “understand that this is a marathon and not a sprint. They’ve seen what happens when companies over-expand.”

Consequently, the Pidgeons won’t put a timetable on their build-out. “It depends on how well we can execute and scale our concept,” David said.

In the meantime, the Starpower -- a member of the Home Entertainment Source buying group and the 2007 winner of TWICE’s Excellence In Retailing Award for Best Specialty A/V Retailer -- plans to make a splash in Scottsdale with special-event marketing that leverages its celebrity customers from the worlds of entertainment and professional sports. The 13-year-old company cultivated its high-profile clients and its reputation as a “luxury brand” through its dedication to customer service, the brothers said, citing a 65-percent repeat business and referral rate. Customers can select from an assortment that includes Klipsch, LG, Pioneer Elite and Sony, and those who spend $50,000 or more on installations can qualify for such V.I.P. perks as gifts baskets and 24-hour call-in service.

Despite its well-heeled clientele -- the average ticket is about $7,500 -- the company, like most, is feeling the effects of the macroeconomic maelstrom. “Right now our business isn’t as robust as it has been in past years,” acknowledged Daniel, “but we’re on track to finish the year on plan.”

He added, “Despite the massive changes in the market, in the long run we’re in an extremely stable niche.” – Additional reporting by Colleen Bohen

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