Re-Tales #14: Reinventing the audio boutique

Photo: Pixart Images, LLC

As I noted in previous Re-Tales columns, audio dealerships that stick to outmoded models after the world has changed may find themselves in danger of extinction. Such conflict between old and new has been with us since the beginning of time, or at least since the internet became ubiquitous. But the pandemic and its economic stresses and stimuli have accelerated the pace of change. So, how are dealers, um, dealing?

One brand—or, rather, one two-branded company—is rolling out a new hi-fi retail chain, along with another option for dealers.

Single-brand audio retail stores aren't new. Devialet and Bang & Olufsen stores can be found in most major cities. Harman opened its first retail store in Shanghai in 2010 and has since opened others in Tokyo, Munich, and New York City—plus a JBL-branded store in New York City's SoHo.

Focal Naim is rolling out two new kinds of stores: a shop-in-shop (SiS)—dedicated, branded "shops" for Focal and Naim products within existing brick-and-mortar dealerships—and standalone "Focal Powered by Naim" (FPbN) boutiques that sell the company's products exclusively. I spoke with Romain Vet, VP of marketing and communication for Focal Naim America, to learn more about their progress and plans.

The first Focal Powered by Naim boutique opened in Seoul, South Korea, in 2019; that was followed quickly by a boutique in Lyon, France. 2020 saw the opening of another Seoul boutique and others in Prague, Guangzhou, Adelaide, and Berlin. The flagship FPbN boutique, in Cannes, opened in August of this year.

The first US boutique opened in Scottsdale, Arizona, in 2019. A second opened in Houston in May of this year; we wrote about that one in the July 2021 Industry Update. Four openings are planned for the US this year—all SiS stores—in Dallas and Austin, Texas, and Miami and Jacksonville, Florida.

All Focal Naim dealers received information about the new programs, which are strictly voluntary—indeed, Focal Naim expects most dealers to continue to do business under their current arrangement, representing Focal and Naim products alongside other brands.

Why should an existing dealer choose to set up an FPbN boutique or a Focal Naim SiS? FPbN and SiS stores will receive products in exclusive finishes and limited editions, and some products are expected to launch in the FPbN–SiS network first, before they're available at other dealerships. FPbN and SiS dealers will also have access to long-term product-planning information.

Anyone interested in creating an FPbN boutique, and current dealers who'd like to investigate setting up an SiS inside their dealership, can contact the company to begin discussions. Priority will go to those with which Focal Naim has existing relationships.

Indeed, those relationships are the most important criteria in choosing FPbN and SiS partners, but geography matters, too. "We did some selection in different big cities worldwide," Vet said about the decision-making process. "But it's mainly based on our dealer relationship and business we do with them."

"We will not say no to a dealer who is not in a big city. We will say yes [only] if we trust the dealer and the dealer trusts in us."

The FPbN arrangement requires the dealer to carry all Focal Naim product lines, Vet said: "We have an agreement to help them with the active demo products in the boutique." At shop-in-shop locations, product selection can be customized. With SiS, "We must work with our partner on the product selections to match with their audience," Vet said. "Products may vary, but we still assist in the overall design and setup." Focal Naim will develop design renderings for the shop-in-shop with the local dealer's input. The company is aiming to maintain a consistent look and feel across its SiS and FPbN boutiques.

Existing dealerships that wish to continue doing business as they always have—selling Focal Naim products alongside other brands—are free to do so. "The other dealers are important," Vet said. "We'll continue to invest with them because we need them. There are no disadvantages." An interesting case is Houston, where Houston Audio worked with Focal Naim to open a branded boutique next door to the existing dealership. You can buy Focal Naim from either store, and if you're interested in products by McIntosh, T+A, Sonus Faber, or other brands, you can buy them at Houston Audio. It's a sort of hybrid arrangement, an SbS, a store beside a store.

Current dealers concerned about market oversaturation needn't worry, Vet said—because the company is coordinating closely with existing dealers: "There is no conflict. It's well-controlled and managed." The program is not here to replace their dealer network, he added, but to exist in addition to it.

Vet says that dealers are responding positively to the program; so far, he says, he hasn't had to sell the concept. So, does he envision all Focal Naim dealers eventually transitioning to either an FPbN or an SiS? "It's hard to say, but probably no," Vet said. "I'm sure that we'll always have some dealers who won't." The goal of the new retail strategies is "to increase our visibility, control our universe, and propose a nice experience to our customers."

tonykaz's picture

A three year triple net lease is probably a short lease but a huge financial commitment to make before any sales begin.

A small dealer will probably need 2,000 sq.ft. Half for the back room and half for the retail side.

Store signage will probably be $5,000 and have to meet local Zoning .

Store Renovations are crazy pricy and require a generous sized Chevy Van for transporting lumber and tools if Diy to lower costs. Reliable trucks are pricy, expect $45,000 up front or a 5 year bank loan.

Charismatic sales people on the Sales floor are hard to find.

Manufacturers will want the NEW Dealer to stock "Two to Go, One to Show". All paid for on 0, 30,60,90 day terms. Get used to COD on orders when the cash gets tight ( which is always )

Shrinkage is not at all uncommon ( for some reason ). Staff might take home demo stuff and forget,

Staff will damage gear ( which ruins NEW price points ).

Customers will demand discounts because they found something on eBay and insist on generous trade-ins that the Dealer can't possibly sell in the Store. ( call Dave Wasserman at Stereo Exchange in NY then Ship to Dave ) Fingers crossed.

When a person Wins Life's Lottery and inherits $10,000,000 he can open an Audio Salon without starving. Then he can become the person with important Status in the Audiophile Community. 4-Sure !! He won't make any money for the first 3 Years because he isn't Industry smart enough and everyone else is fighting for his available purchase cash. His purchases will be "money in the Bank" the Sales people will say !!

The New Dealer needs a solid 50% but the Manufacturer may only give 45%. A slow bleeding to death.

The Landlord is the only big Winner in the Above Formula. He gets the full rent and then gets a full Stereo when the Business closes early while being 3 months in arrears .

The Yellow pages will also take a big slice.

There aren't any Andy Singers any more. Sales Reps are fooling around doing home installs.

Detroit still has the Great Harry Francis and Audio Dimensions offering Audio Research but all the other Audio Dealers are loooooooonnnnnnnggggg gone. ( including me, of course )

Do it if you have money you haven't spent yet.

Tony in Florida

Commish's picture

You start with a large fortune.
You don't get to sit around and listen to music all day, it is a difficult business.

PeterG's picture

But just a tad. I could see this if you were NOT a boutique dealer already--it's kind of a packaged entry into the space, similar to a franchise in some ways. But the whole advantage of going to a real dealer for hifi is the easy comparison across great brands. I want the Focals, B&Ws, Wilsons...all in the same room

dsnyc's picture

Why on Earth would anyone open a retail outlet without owning the space it occupies?

tonykaz's picture

People that own Retail Space are professional Property owners.

They've owned and developed property over the decades.

A Retail Property Owner might decide to do a Retail Store but would probably rather buy another Strip Mall to develop or a Group of Buildings for Doctor's Offices.

Audio Retail is a Hobby Business servicing we Neurotic/Psychotics.

Conversely, Europe has interesting Brands like Linn, Meridian, B&O, Focal and a good number of others that service the entire Envelope of Customer Needs and Aspirations including the Entire Family in the Music Investment. These Brands can be Stand Alone Speciality Shops that are often located in any of Europe's Small Villages.

Europe's One Brand Music Systems are a joy to own, allow the entire Family to participate in and tend to be wonderfully reliable while offering outstanding Manufacturer Service.

Tony in Florida