Audio Advice, the North Carolina–based hi-fi company, has been busy—and bullish. Recent acquisitions have brought its empire to seven stores. For years, Audio Advice has also hosted a hi-fi and home-theater show. This year's Audio Advice Live takes place in its home city of Raleigh, North Carolina, August 7–9, which means it will start just after this issue drops.
The last time I interviewed Scott Newnam (on the right in the photo above), Audio Advice's CEO, the company had just acquired The Sound Room in St. Louis. In our latest chat, there were two main topics: breaking ground on its Las Vegas superstore and its recent acquisition of Miami-based dealership Sound Components, which it intends to expand.
This time I talked with Newnam and Sound Components proprietor Bill Petters (on the left in the photo above). I asked both: Why make this deal?
For many hi-fi store owners, especially those approaching retirement—that's a significant percentage—teaming up with a larger entity brings advantages. Petters will stay on as store manager. The acquisition lets the store keep operating and even expand while also gaining marketing support and broader online reach. And Petters can step aside when the time comes without worrying about succession plans.
The deal had been in the works for more than a year and was finalized just before we spoke in late June. Both Petters and Newnam said it was a natural fit for a few reasons. "Our companies are so uniquely aligned," Petters said.
"It's all about relational fit and a belief in core values," Newnam added. "We're all about serving the customer, performing at the high end." It helps that Newnam and Petters have known each other since Newnam arrived at Audio Advice.
"Our focus the whole time, Bill and I, has been, Okay, can we serve our customers better if we do this?" Newnam said. "Our employees throughout the whole company, Miami, and our other locations, is this better for them? And if the answer was yes—to both—I think we both wanted to do it."
The movement toward modern marketing was a plus for Petters. "Scott is a real monster when it comes to advertising and marketing. He does all the things that we don't do well, very, very well," Petters said.
Some hi-fi dealerships focus on select manufacturers and niche offerings. Audio Advice takes a maximalist approach. It doesn't just aim to retain existing staff (owners included, unless they are ready to retire). It aims to expand the businesses it acquires, which requires more staff: new salespeople, more customer-support reps.
The Miami Audio Advice will carry the same brands Sound Components already carried—the store has long had a home-theater/custom-installation focus—while expanding two-channel offerings. The acquisition is letting it expand the showroom and to buy the building next door. "We'll be able to have another 2500–2600 square feet of showroom," Petters said. "We'll have much more audio product on display" so that people "can really experience the whole gamut of high-performance audio."
As regular readers of this column know, "experience" is a big word in hi-fi these days, with many dealerships rebranding as "experience centers."
Expansion into markets where larger spaces are more readily (and ideally more affordably) available appears to be a trend. "You can look at the pattern of large markets, and part of it is, a lot of these large markets don't have stores the size we do," Newnam said. That matters for companies like Audio Advice, which represent many companies and products across categories and prices and need the space to demonstrate them. Shipping and warehousing logistics are aided by proximity to an international airport. Space is also needed to house a robust customer-service operation. You don't often find that kind of space in, say, Manhattan.
Miami seems ideal demographically, too. "There's a lot of people moving from the Northeast and from California, either with second homes or primary homes," Newnam said. "And so, it's very strategic for us to serve the Miami market, but it also allows the teams in our other markets and in Miami to serve people with multiple homes."
Miami is apparently one of a handful of hi-fi hotspots across the US, where the brick-and-mortar hi-fi industry is expanding. Another hotspot is Las Vegas—and Audio Advice recently announced a new Las Vegas superstore, some 9000ft2 of space, about the size of a smallish Trader Joe's. The Las Vegas location is close to the airport and the Strip. Importer-distributor Supreme Acoustic Systems also recently opened a store in Las Vegas.
Although Audio Advice relies heavily on the internet for e-commerce and customer reach, it doesn't want its brick-and-mortar presence to be overshadowed, Newnam said. It's that word again: experience. "A lot of hi-fi stores have been closing in this country, and it's been people having less stores and more e-com. And we're believing the exact opposite. We're big believers that the experiential thing makes a lot of sense, where people can touch and feel and hear music and go to theaters.
"It used to be, 20 years ago, that [customers] could go into all these stores and listen to speakers and all sorts of stuff," Newnam said. "There's not that many places anymore. We want to be like the Disneyland for people that love audio.
One of the rooms at Sound Components' Miami location.
Sound Components was founded 50-plus years ago by Peter McGrath, now of Wilson Audio. Petters has owned it for some 15 years. Now it's entering another a new era. Stereophile asked McGrath to comment. "I'm glad Bill will remain as general manager," he said. "I wish him and Sound Components all the best."
