Sound by Singer, High-End New York City Audio Store, Shutting Doors After 31 Years, Moving Online

In one of the most convincing signs yet that high-end audio and video is on an inevitable course toward Internet sales, seminal high-end New York City retailer Sound by Singer shut the doors of its 31-year-old Manhattan store and plans to re-launch as Sound by Singer Direct in the coming months. Like other high-end brick-and-mortar retailers, the company once “moaned and complained and jumped up and down” when audiophile manufacturers Balanced Audio Technology, Luxman, Thiel Audio and DPI went online, said Sound by Singer President Andy Singer. Now, facing a significant rent increase after a “horrible” two years of AV retailing, a resigned Singer is going to the other side.

"It’s the way things are going,” Singer told Consumer Electronics Daily. The company signed a lease in 2008 that called for a significant rent increase, he said. “A perfect storm occurred in which the rent went up and all other expenses went up and sales went down,” he said. Asked whether online sales go against everything high-end audio stands for, including offering the ability to audition products, Singer said, “No, I don’t think it does. I'm changing my opinion."

Consumers think differently about shopping for electronics today, taking more of a do-it-yourself approach to setting up their own electronics, Singer said. With high-end audio, the model of a brick-and-mortar store has also changed in people’s minds. “I would have thought it wouldn’t be possible, but just like people set up their own computers and pick their own music, I guess you'd say the same has come true for high-end audio,” he said. A few years ago, he would have thought this model “was a terrible way to do things, but if you look at online companies like Audio Advisors and Music Direct, they seem to be doing extremely well,” Singer said.

At the same time, Singer is banking on the expertise and reputation he developed as a high-end audio-store owner to carry the company through to the direct model. That, he said, will separate his e-store from mammoths including Amazon and eBay. “You're going to have an extremely competent person, me, and at least one other person to answer questions and help people select things that work together,” he said. Regarding the in-store demos that specialty dealers have traditionally relied on for differentiation from volume retailers, Singer said, “A number of customers have bought things entirely on my recommendation, and that has worked better than 10 demos, because there is no such thing as a true A-B comparison."

One distributor not following Singer Direct is Specialty Sound & Vision, a New Jersey-based firm that represents Gallo Acoustics, PS Audio, Musical Fidelity, NAD, Leon Audio, Simaudio and others. SSV CEO Anthony Chiarella said Singer’s “new business model simply doesn’t work for any of the limited distribution brands I represent” or fit with SSV’s business model. “The other brick-and-mortar dealers in New York (and the rest of the country) depend upon brands that offer extremely limited distribution of their products,” Chiarella said. “If an Internet or mail-order operation with lower overhead and operating costs were able to sell the same brands, they'd have a distinct pricing advantage.” He said the long-term result would be “the extinction of brick-and-mortar showrooms” for specialty AV products. Ultimately, he said, “without dealerships capable of demonstrating these products and their elevated performance capabilities, specialty audio might cease to exist."

"The real question everybody avoids is, ‘Won’t the online seller discount product, because of the lack of overhead advantage?'” Singer said. “The answer is, ‘It’s a legal question and we're not going to discuss that.'” Understanding the sensitive issues involved, he’s still trying to navigate the description of his nascent business. After saying there are manufacturers “perfectly willing to go with me on an online basis,” Singer declined to name them, saying they would be identified on a “need-to-know basis.” He added, “Let’s not call it online. It’s not a pick-and-click sort of thing.” Brands will be listed, he said, and consumers will be directed to call or e-mail for prices, he said. Less-expensive products that are widely available on the Internet will be available through a typical online cart process, he said, but consumers interested in limited distribution, high-end products will have to call or e-mail for more information. The store’s website bills the upcoming Sound by Singer Direct as “a new approach to online, by telephone/e-mail sales of high-end audio/video components."

Peachtree Audio, which sells high-end audio products designed to boost the quality of MP3 and Internet radio sound from its website and through dealers, “probably will” sell through Singer Direct, said President Jim Spainhour. “That’s how a lot of it has gone these days,” he said, “but I hate to see it happen.” Spainhour said that Singer’s was a “statement store” in two-channel audio. “He offered an incredible selection with lots of listening rooms,” he said, while giving a lot of limited-distribution brands a high-profile pad to launch from. “Andy always jumped on the new brands that were getting good reviews while a lot of the other specialty stores settled on four or five lines and kept them,” Spainhour said.

A high-end supplier who is considering going with Singer said four of his company’s top five dealers sell online. He asked that the company’s name not be published, “so we don’t tip off the competition.” But like Singer, he said demos are not as important as they used to be. “Consumers don’t want to take the time to go into a store.” The company runs banner ads on audiophile websites and gets good feedback and hits from those, he said. But when one of the electronics blog sites did a roundup of emerging computer audio trends and gave his company a one-paragraph mention, “We got more hits in two days from that article than we did from all the audiophile sites put together in a month,” the manufacturer said. “Online we're reaching a market we wouldn’t have gotten otherwise. There are potential customers out there, but we're not reaching out the way we should. That was a surprise and got our attention."

One of the online issues Singer is grappling with is product returns. Consumers will be auditioning product in their own homes rather than in store. “The problem with return policies is, what do you do with returns?” Singer said. For every company that has a refund return policy, “there’s a bunch of equipment they wind up selling to people as brand new when in fact it’s been used,” Singer said. “That’s always raised a question in my mind why someone would think they're getting a new piece versus something that’s been repacked,” he said. “That has no effect on whether the equipment works properly but it is a troubling question."

Although selling online is the way things are going, Singer said, he’s leaving open the possibility of having a showroom in the future. “I may, and I never said I wasn’t,” he said. “But the idea of having a big showroom where the acoustics are perfect and you're paying super rents in a city like New York doesn’t make economic sense.” How his distributors and manufacturer partners would react to that is also open. “Sound By Singer is an institution in the industry,” said Adam Schmidt, Runco GM. “I visited Andy late last year, enjoyed our time together, and appreciated his candor about the challenges he was facing in an evolving market and economy.” Chiarella of SSV considers Singer a friend and would do business again. “I eagerly look forward to rekindling our business relationship with Sound by Singer if Andy opens a new brick-and-mortar location,” he said.