NHT Takes A Break

"It's time to turn down the lights: NHT is going quiet."

Thus began a February 23rd announcement from loudspeaker company NHT (Now Hear This) that it is temporarily closing its doors in order to revision its future.

Two weeks after informing its dealers, NHT, which is based in Benicia, California, spread the word in a simple, one-page letter that's high in spirits if low on details. Jovially titled "Going Fishin'," the message from company cofounder Chris Byrne, longtime employee John Johnsen, and "the entire NHT gang" explained that all remaining professional and consumer inventory will be sold over the next 60 days via NHT's existing dealer and distributor network.

NHT's final day of "regular" business is expected to be March 31, 2009. After paying all bills—the company is not bankrupt—Byrne and crew will spend some time rethinking their strategy in a world of changing consumer attitudes and economics. While they plot the next phase of operations, NHT's customer-service and repair divisions, for products both in and out of warranty, will continue.

Speaking by phone from NHT's offices, Byrne assured Stereophile that he wasn't speaking from the Twilight Zone when he wrote, "Remember, this isn't 'Good-bye,' it's just 'See you on the other side.'

"We've been looking at the audio biz for the last four or five years," he said, "and seeing significant changes in consumer attitudes, applications, requirements, etc. We've wanted to do something about it for a while. But being a small company, we get caught up in day-to-day matters, and lose focus on the paradigm shift that's required. Our business model needs to be reexamined. We don't have anywhere the number of retailers we had in the '90s, and that includes home installers who can sit down with you and listen and go through the steps. Audio has changed, and home theater quickly became so complex that you have to hire an expert to come in and explain it."

NHT has been profitable ever since Byrne bought the company back from the Da Vinci investment group in February 2008. Given the economic downturn, however, he fears that the audio business will be doing a fair amount worse through 2009 and well into 2010. Now, he senses, is an ideal time to take stock.

"We knew the need for change," he says. "It seems prudent to give the company a nap while keeping the website up and keeping serving customers. We will hang on to the brand. We were afraid that if we tried to get through 2009, we'd lose the brand again, and that was intolerable.

"There's a new business model needed. NHT has always wanted to provide high-end sound for people without a high-end budget. We can provide 95% of the sound you get from a $20,000 product while spending a whole lot less. But we've kind of gotten away from that idea. Our stuff has gotten more expensive, and we find ourselves all of a sudden with 38 models. Our day-to-day business has interfered with us seeing where we're going. We need to step back."

Byrne wants to refocus NHT on such breakthrough technologies as DSP correction for loudspeakers and wireless transmission. He also hopes to forge new alliances with other companies, as NHT did some years ago when it partnered with Power Physics of Los Angeles and DEQX of Australia to issue the XD system, a well-regarded speaker system with built-in DSP-realized crossovers and equalization.

The hope is that NHT will return to production in early 2010. Of the company's current product lines, Byrne conjectures that the only model that may continue is the 12-year-old M-00 self-powered monitor, which he considers "a wonderful loudspeaker." He also envisions a new, wireless, self-powered loudspeaker, manufactured in Benicia, albeit in a smaller space than the company now occupies.

"We aren't done yet," Byrne assured Stereophile. "We've sold a couple million speakers, and people love them. I think it's because we love music. A number of us in the company play music; I play rock/blues guitar. We know what music is supposed to sound like, and we want to share what we know. We love this brand, and we love the business. We're not ready to stop."