By Lisa Johnston
New products on display at the American International Toy Fair, held in N
In the previous issue of TWICE, four dealers were profiled as part of our annual Retailers To Watch series, which highlights CE and major appliance merchants who have built successful businesses based on marketing, store design, strategy, service and/or selection. (See TWICE, Aug. 9, p. 16.)
The second annual Retailers To Watch installment concludes this week with examinations of Video & Audio Center (VAC) and Tresch Galleria. VAC has taken custom home installation demonstration to new heights with its new fully automated $10 million smart home in Beverly Hills, while Tresch, which began as an electrical contracting concern, successfully branched off into home integration and now traditional retail sales for consumers within California's upscale Marin County. Congratulations, dealers.
1426 Wilshire Blvd.
Santa Monica, CA 90403
Joseph Akhtarzad, VP, Video & Audio Center; president, Just One Touch showroom
Product mix: opening price point to premium audio, video and accessories; custom installation, home automation and security
Santa Monica, Calif. — Consumer electronics retailing was a different animal 23 years ago, when brothers Joseph and Mayer Akhtarzad opened their first A/V store here on Wilshire Blvd. Selling a broad spectrum of low- to high-end CE, and finding their niche alongside behemoths like Best Buy, Circuit City and Good Guys, the store became a Los Angeles area fixture and "one of the strongest retailers in Southern California," Joseph said, prompting the opening of a second location in nearby Torrence.
While the retail locations continue to thrive, Joseph, who holds a master's degree in electronics, realized that given the price compression in CE, and the needs of his upscale and celebrity clientele, the future of his company and livelihood lay in custom home installation.
"We knew this was the future direction," he said. "There are no more margins left in retail, so custom installation is the answer, if you do it right. Lots of folks go out of business in custom, and I don't think the big chains can survive in this business either. It requires too much of a personal touch."
The Akhtarzads' first major statement in custom came three years ago with the opening of Just One Touch, a galleria-style showroom located across the street from the original Santa Monica store. Built around manufac turer-based vignettes and tradeshow-type displays, the space is used to demonstrate to qualified customers the company's prowess in designing and installing home theaters, multiroom A/V systems and, as the name suggests, total automation and electronic lighting control systems.
But the company's piece de resistance is the ultimate showcase for home automation and integration: a 14,000-square-foot custom model home located on a half-acre in the heart of Beverly Hills. Four years in the making and set to officially open in October, the $10 million showplace is completely automated, with all functions — including lighting, security cameras, solar shades, Jacuzzi and spa, distributed audio and video, and even a chandelier lift that lowers and raises the two-story-high fixture — controlled by a notebook computer. The house also features a million-dollar home theater, full computer integration and LCD and plasma displays throughout.
"It's a huge investment" — supported in part by such vendors as Monster Cable, Speakercraft, Marantz, Lexicon, Questron and Sharp — "but to be in this business you have to do it right," Joseph said. "This house will let customers see and feel what we are about and what we can do."
Besides client demos, the home will also serve as a backdrop for a series of food and wine events this fall for contractors, architects and interior designers to better acquaint those communities with the company. Vendors will also be on hand. "I support the manufacturers. I am partners with them, and they always support my events," Joseph said.
Having both the CEDIA-certified custom install business — which is supported by an in-house team of architects, designers, engineers and 20 installers — and the two retail locations provides this Home Theater Specialists of America (HTSA) member with the best of both worlds. "It's a win-win situation," Joseph said.
7400 Redwood Boulevard
Novato, CA 94945
Mani Majano, CFO
Product mix: Major appliances, kitchen remodeling, audio/video, custom home installation and automation, furniture
Novato, Calif.— Many independent CE dealers begin life as traditional retailers and expand into custom installation as a hedge against competition from larger regional or national chains. But it was just the opposite for Tresch Galleria, which sells and installs brown and white goods and home automation systems in California's wealthy Marin County and San Francisco Bay area.
The family business, which dates back to the 1920s, began as a commercial and later residential electrical contractor offering custom install and home automation services. But thanks in part to competition from the growing ranks of out-of-the-trunk installers, the company decided to take on inventory as an added convenience for its clients and an additional revenue stream for the business.
Beginning as a GE family franchise in the 1920s, the company was formerly established in 1945 as Tresch Electrical Company, a heavy industrial electrical contractor which continues to retrofit lighting for such commercial clients as schools, jails, and sewage and water treatment plants.
Eventually the company branched out into residential work, where it provided hard-wired home theater, automation and security systems to a celebrity clientele that includes a major entertainment production company, a legendary rock band and numerous film and television stars. The business also provided kitchen remodeling services ranging from cabinetry and plumbing to flooring and countering.
Building on its success, Tresch opened its doors to the general public some seven years ago and joined the AVB buying group (now Brand Source/AVB) in order to get a better grounding in retail. "We joined to get a retail education, to hear the presentations and learn what's going on," recalled Mani Majano, the company's chief financial officer.
More recently, Tresch decided to take the plunge and sell product as well. "We had to," Majano said, citing the influx of freelance installers and the impact of the Internet bubble on San Francisco's largely tech-driven economy. "But it's working out fine." Brands run the gamut from value to premium, spanning Roper to Bosch in major appliances, and Apex to Nakamichi in CE. A selection of freestanding furniture, including theater chairs, is carried as well.
Today, revenue is split evenly between the commercial and residential operations, with the latter working out of three storefronts ranging in size from 1,200 square feet to 3,500 square feet. The smaller location is actually the company's first store, which is situated behind a newer, larger facility and is in the process of being remodeled as a dedicated home theater shop.
Given the retrenchment within the tech community, Tresch's home installation goals are relatively modest these days. "We focus on the mid-entry level, roughly $10,000 to $30,000 jobs," Majano said. "But we're always making changes, always learning and training, and establishing relationships with clients to generate good word of mouth. It's all based on trust."
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.