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HTSA: Staying Above The Competitive Fray

While consumer anxiety and a sputtering economy may be taking a toll on regional and national CE chains, the 46 high-end A/V dealers that comprise the Home Theater Specialists of America (HTSA) continue to ride out the storm by flying over it.

“Because of our affluent clientele, which includes stock brokers as well as entertainers, athletes, musicians and other celebrities, we can ride the economic wave better than other retailers,” explained Richard Glikes, executive director of the seven-year-old, $450 million buying group.

Most of HTSA’s member dealers didn’t start off serving the luxury custom-installation market, but would come to find sanctuary — and hefty profits — in trading their businesses up.

“These dealers have adapted,” Glikes observed. “Most were over-the-counter audio stores who realized that they couldn’t compete with Best Buy and Circuit City head-to-head. So they morphed and adapted to the world.”

Consequently, white glove installation of Runco, Fujitsu, Loewe and Pioneer Elite plasma displays and KEF, Martin Logan, Linn and Krell sound systems, among others, gave the group an estimated 10 percent share of the plasma market two years ago, and until recently yielded sustained, compounded growth of 30 percent to 40 percent annually.

Granted, those rates have modified somewhat in the post-9/11 world. As Glikes noted, “It’s a little weird right now. All boats are not rising in high tide, so we have some members up 20 percent while others are down 5 percent.”

Nevertheless, with new home construction at an all-time high, Glikes believes that there’s still “a lot of growth in this category.”

Glikes will likely hammer that point home later this week when some 220 members, vendors and family guests convene at Los Cabos, Mexico from March 16 through March 19 for the group’s semiannual conference. The gathering serves as a forum for at least two of the four primary functions that HTSA performs for its dealers: Sharing ideas and information — including such issues as inventory control, turns, security, compensation and effective advertising — and building vendor relationships.

“Smaller dealers don’t usually have an opportunity to interface with the manufacturers,” Glikes said of the second point. The conference helps remedy that through shared meals and activities, roundtable discussions and a series of 12 one-on-one dealer-vendor meetings, he said.

HTSA’s two other main duties are developing member programs — covering such areas as rebates, advertising, freight and allocations — and creating co-op advertising programs. This year the group plans to circulate some 30 million vendor-supported newspaper inserts, which are printed in four different versions on heavy stock and branded with a dealer’s logo.

Members generally fall into three categories: Promoting specialists, which are typically larger dealers; big screen stores, which is largely a West Coast phenomenon; and custom installers/retailers, Glikes said.

Membership, whose prerequisites include a minimum of five years in business and annual sales of at least $5 million, gives dealers entrée into an elite club that includes Video & Audio Center, a favorite of the Hollywood crowd; Houston’s seven-unit Home Theater Store; and The Big Apple’s own Harvey Electronics.

While HTSA’s success in custom install has not gone unnoticed by big box chains, cable/phone/alarm companies, and independent “trunk slammers,” Glikes remains unruffled by the would-be competition. “Anyone can do custom install,” he said, “but not everyone can make money doing it.”