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Custom Rebounds As It Prepares For Expo

The custom-installation industry withstood assaults from an extended bear market, the dot-com implosion, a slow-growth economy and terrorism to begin a turnaround in recent months, which is lifting installers’ spirits in time for CEDIA’s Expo.

The industry will celebrate the recovery here at CEDIA’s biggest-ever Expo, scheduled for Sept. 25-29. About 400 exhibitors and the second annual Installer Olympics will occupy 487,500 gross square feet of space. That’s up from last year’s Indianapolis convention, where 403,500 gross square feet were carved out for 383 exhibits and for the installation-skill competition.

“We sold out all the space,” said Jeff Hoover, CEDIA president and owner of Florida’s Audio Advisors. Attendance is also poised to meet or exceed last year’s 17,500. “I would be surprised if it’s down,” he said.

Despite the industry’s pickup, this year’s Expo will be a no-frills affair, with CEDIA dropping its annual golf tournament and concert so attendees can concentrate on updating their product knowledge and their business and installation skills. Hoover attributed the change to member requests.

The sober-minded event will follow more than a year of sobering economic news, which dragged down some installers’ double-digit growth rates to the mid-single digits and flattened revenue for others. The economic jolts may also have been factors in the demise of multiple installation showrooms in the past year, particularly if the companies hadn’t implemented good business practices, installers and marketers told TWICE.

“You can live on deposits for only so long, but at some time, the books have to balance,” said Expo chairman Andy Willcox, owner of ProLine Integrated Systems.

For most of the installers that he has contacted, Willcox said, business started to come back in the first quarter. Business for his Chicago- and Fort Lauderdale, Fla.-based company, however, “caught fire” in mid-October after the initial shock of the terrorist incidents waned and people cut back their travel to cocoon in their homes, he said.

For some installers, the turnaround came later, and for some, it still hasn’t arrived, said Hoover. “Things are still quite slow for a lot of people, but reports are they’re picking up,” he said. Most installers have told him they suffered a no-growth period through August.

Jeff Goldtsein, head of Sony’s custom group, found that the number of $100,000-plus jobs wasn’t declining before Sept. 11, but the size of many of those jobs was scaled back. The number of new jobs priced at $40,000 and less, however, was falling before then. The attacks led to a “very quiet January” at the installer level, but “now, business is great, and there’s not enough time” to handle all the work, he said.

Although the continued strength in the new-home market created a safety net for the industry, a strong housing market alone doesn’t guarantee custom growth, Hoover and Willcox cautioned. “The new-housing market doesn’t necessarily drive growth,” Hoover said. “More structured wiring is probably being pulled, but people are still being cautious and not trimming out with as much equipment.”

Although the vibrant new-housing market aids the industry’s fortunes, growing consumer awareness is also driving growth, Willcox said. “The market would grow even if the home building market dropped off,” he claimed. “If the housing market slows, I’ll do more outreach to architects, interior designers and builders to further build market awareness.”

Although the industry’s long-term outlook is rosy, individual companies aren’t guaranteed success without sound business practices. To promote management professionalism, CEDIA will for the third year offer an expanded slate of seminars devoted to sales, marketing and management issues. Previously, technical topics dominated the seminar series.

The number of seminar topics will remain at 150, although the number of sessions will be scaled slightly back to 220 from 240 in nine tracks rather than 10, said Suzanna Nation, education events manager. Hoover said the changes eliminate seminar redundancy. The remaining seminars were revamped and updated “to ensure our education is the best it can be,” he added.

Also to deliver on its educational mission, CEDIA will:

  • For the second consecutive year offer full-day seminars to prepare installers to take the Installer Level I and II certification tests during the Expo.
  • Add a full-day seminar for installers planning to take the Designer Level I certification test.
  • And expand the number of participants in its installer boot camp, targeted to entry-level installers.

On top of that, CEDIA will introduce its Idea Bank, Willcox said. The Web-based initiative will enable participants to share documents that they use in their business. For every contract or other document deposited into the bank, users can make two withdrawals, Willcox explained. CEDIA’s board members already loaded up the site with almost 100 documents, he said.

Installers will also be able to use the show to brush up on the latest product developments, which will include:

  • Traditional consumer electronics devices, such as receivers, sporting more custom-oriented features, including RS-232 ports, Ethernet ports and multiple 12-volt triggers.
  • At least two more audio specialty suppliers, including Yamaha and Marantz, introducing their first SACD/DVD-AV players.
  • At least two more suppliers, including Onkyo’s Integra division, launching their first multizone hard-drive-based home audio servers, with Integra’s using Ethernet wires for distribution.
  • And more HD video displays with DVI inputs.