Sound by Singer Closing or "Why the High End is Doomed, part 2"

[MylesBAstor]

Speaking as an old-timer, his first store was that walk-up but it was on Lexington Ave. between 34th and 33rd. From there, he went to a store front operation on 33rd between Lex and 3rd.

Kal

Thanks for the correction Kal. I remembered, albeit faintly, Andy's store being between 33rd and 34th. I'm not sure I remember the second location.

I do remember hearing some pretty awesome systems in those days at Andys. One was a system consisting of Acoustat 2+2s, ARC preamp, Linn table and I think a Hafler amp. The imaging and resolution was for that day, simply spectacular.

 

[rblnr]

Well how many high end dealers such as SBS have such a huge dealership line and then to have much of that on display for audition is mind bogling

Yeah, and that's a ton of overhead. The list is more mid-priced than I expected though that may be just what's listed or left. My experience of SBS over the last 10 years or so is that they were much more interested in pushing the super-expensive stuff than the mid-priced. This may reflect the reality of Manhattan -- very little middle class left (the whole country is following this lead), one 60K sale yields more than 10 2K sales, and whatever lease they were currently in. My office used to be down the street from them and rents/leases in the Flatiron are tremendously higher than they were. A 5 - 7 year lease would have been signed at the height of the market, very tough to cover nowadays, particularly in a relatively low demand business. Most of the stores in that neighborhood are either chains that can absorb the rent or high end home improvement (tile, fixtures, etc.) stuff for which there is more demand. People are more inclined to pay 2K for a toilet than a pair of speakers. As pointed out, still a head scratcher though why landlords would rather go empty in these times with a lot of vacant storefronts than make something work. I see this in my relatively affluent suburb as well.

I bought my first 'real' amp at SBS 15 or so yrs. ago -- was able to audition 6 amps in the 2K range. Those days are over. Outside of home-based audio dealers, it's hard from me to see how you can't be pushing HT and mobile stuff as a trojan horse into the higher end.

 

[FrantzM]

Speaking as an old-timer, his first store was that walk-up but it was on Lexington Ave. between 34th and 33rd. From there, he went to a store front operation on 33rd between Lex and 3rd.

Kal

At the risk of sounding like an old Timer too .. That's what I remember too... back in 1983 ... I remember auditioning the Watts not Puppies yet there in some kind of passageway, not a real room ...

 

[amirm]

As pointed out, still a head scratcher though why landlords would rather go empty in these times with a lot of vacant storefronts than make something work.

Indeed, no landlord would let a *paying* tenant leave in this market. They would restructure the lease than lose that tenant. So logic dictates that he was behind in his rent and that is the reason he was pushed out. Note how the notice on their site says nothing about them moving somewhere else but rather, pondering their next move.

All the second hand data I hear points to fundamental problems with his model of doing business.

 

[rblnr]

Indeed, no landlord would let a *paying* tenant leave in this market. They would restructure the lease than lose that tenant. So logic dictates that he was behind in his rent and that is the reason he was pushed out. Note how the notice on their site says nothing about them moving somewhere else but rather, pondering their next move.

All the second hand data I hear points to fundamental problems with his model of doing business.

I basically agree, though I do know some building owners in NYC who are convinced it's better to ride out the next year or two than sign a long term lease at what they view to be a compromised price.

 

[MylesBAstor]

Indeed, no landlord would let a *paying* tenant leave in this market. They would restructure the lease than lose that tenant. So logic dictates that he was behind in his rent and that is the reason he was pushed out. Note how the notice on their site says nothing about them moving somewhere else but rather, pondering their next move.

All the second hand data I hear points to fundamental problems with his model of doing business.

Amir,

I can only tell you from my experience. My many clients in the finanacial and real estate world give me a "unique" perspective on the area

Also how many "fall" behind when they know the lease is coming due and the end is near since they can't afford another rent raise?

 

[MylesBAstor]

I basically agree, though I do know some building owners in NYC who are convinced it's better to ride out the next year or two than sign a long term lease at what they view to be a compromised price.

I think the latter is probably a good reason for what I see. But how are they going to pay for the mortgage on their building if they lose the rent?

 

[Elliot G.]

As a dealer for the last 30 years I can tell you gentleman that the problems of the HE business are many. The Industry does little if anything but compete for the small amount of turf that is available. We are NOT High End, we are expensive esoteric and there is a huge difference sadly.
We have no marketing
We have little advertising except to ourselves
We depend on reviewers to spread the word and market the products This really does not work anymore if it ever did.
We have no real financial tools available to the consumers or the dealers. Imagine the car business with no financing !!!!!
We have no creative solutions too promote ourselves outside of our own small community
Prices are high because volume is very small and most expensive products are built with expensive parts purchased in very small quantities, ergo you are paying retail for every part in the 100k speaker and then margin and mark up on top.



If Andy Singer was really doing well, like in the past, he would either have moved to a new location or made a deal to keep his lease. Times are hard for all dealers because there is much less disposable income around, products are expensive, they are really good for the most part and the ability ot easily dispose of the old to buy new is slow. I wish him and his family the best it is sad to see him go.

 

[naturephoto1]

If they do in fact close, it will be another sad day for this industry. My own Hi End store near Allentown, PA closed but was supposed to move to a new location, but it seems that they too are no more.

I hope that something can be done to avoid the closing of the business, but we will have to keep our fingers crossed that something may be able to change what is anticipated.

Rich

 

[Steve williams]

Notwithstanding all of the very valid points everyone makes re the demise of the HE, let me pose a rhetoric question. If indeed steel and stone structures disappear such as SBS and all gear is purchased direct from the dealer could this be a bad thing if indeed the middle man is eliminated. Now, i do understandabout the conveniences of auditions etc at the local dealer but IMO to buy direct should reduce the purchase price by as much as 40-50%

 

[rblnr]

Notwithstanding all of the very valid points everyone makes re the demise of the HE, let me pose a rhetoric question. If indeed steel and stone structures disappear such as SBS and all gear is purchased direct from the dealer could this be a bad thing if indeed the middle man is eliminated. Now, i do understandabout the conveniences of auditions etc at the local dealer but IMO to buy direct should reduce the purchase price by as much as 40-50%

Then the whole market is just people wh read reviews and so forth -- nuts like us. There's no point of entry for novices, no?

 

[Steve williams]

IMHO point of entry will always exist with places such as Circuit City etc.

 

[rblnr]

Fair enough, though Best Buy is pretty much it now.

 

[FrantzM]

Hi

I believe that the value of better sound is not lost on the new generation. This is where marketing come in the mix... High End is not marketed toward the new generation... or at least it is not done very well... By marketing I don't only mean the commercial but pricing as well and pricing strategy commensurate with performance ... To me that remains an issue .. We can swerve around it but when a $100,000 component an amp for example doesn't obliterate a $10,000 one, I would say that there is a real problem that won't go away by simply ignoring it...
Let's not even talk about over 30 K speaker cables or a component I heard change the molecules of the air resulting in better sound ... Its designer says however he doesn't know exactly how it works... Makes One wonder how he came up with it .... Sorry for the OT ...

 

[ack]

Speaking of OT - anyone else seen the Weiss Maya? $200K DAC http://www.hififorum.nu/forum/topic.asp?TOPIC_ID=54678&whichpage=44. We have lost it completely.

 

[Bruce B]

Just got my new Stereophile today and noticed a full page ad for SBS. Guess it's too late....
Can't believe how much these 'zines are charging for ads.

 

[rblnr]

As for marketing to people potentially interested in better sound, Nuforce comes to mind as a company that gets it. They've got a lot of inexpensive mobile and computer audio stuff that can be a pathway to their higher end traditional components. They're active on forums and social media, they have dealers and sell direct too. Hope they're doing well.

 

[amirm]

Amir,

I can only tell you from my experience. My many clients in the finanacial and real estate world give me a "unique" perspective on the area

My side venture has an office in NY so I have a feel for the place too but would bow at people living there .

Also how many "fall" behind when they know the lease is coming due and the end is near since they can't afford another rent raise?

Who is raising rents there Myles? I can't imagine anyone doing that in this economy. As I mentioned, from what I have heard, his problems have had nothing to do with lease and A/V in general but rather the unorthodox way of selling gear in a down market.

 

[Alan Sircom]

Having lived and worked in London, I'm inclined to take SBS's claims about the lease at face value, because big city rents don't work like normal rental markets.

Manhattan real estate is disturbingly expensive and the landlords of such property usually play a very long game. As in, a few families keep huge chunks of the city in their leasehold portfolio for generations. The affairs of one store owner out of hundreds is not important - if it's prime real estate and will be leased at a far higher rate sooner or later. Renegotiating a 25-year lease with someone who thinks in terms of how this will benefit their great-grandchildren is a futile gesture.

I have worked for a company that was ousted from its central London office for precisely the same reason. The lease was up, the landlord tripled the rent, the company moved elsewhere. The building has remained unleased for the last five years, but the landlord doesn't care because:

1. He has 300 other similar properties
2. When it is leased, he'll make more money in the first year than he would have done from extending the lease and keeping the rent reasonable

There's another issue, too. Redevelopment. If - in a few years from now - the area where SBS resides is going to be redeveloped, it's better not to have sitting tenants with long, inexpensive leases in place. Far better to sting prospective short term. tenants with very high rates so that the property has a high churn rate.

Not every landlord owns hundreds of properties for hundreds of years, some own a few, and are still paying for them. Those are the ones most likely to raise the rent when leases come up, if they come up in a recession. If you have 20 properties and five are empty because companies have gone bust, you need to make revenue to cover them, which means raising the rent for the surviving companies. Some will walk away from the deal, but the hope is enough will continue in their premises to cover the losses.

This holds, especially in a real estate market downturn, because the landlord can't sell the bricks and mortar easily, or with good returns. And as Manhattan is one of those places with higher than average demand and finite space, rent rises are the norm... even in a slump.

 

[brianherlihy]

I was quite surprised to see this. i have bought a lot of equipment at SBS (particularly over the last two years) - Like Frantz - i have had my ups and downs with SBS - i have spent more than ten years going in and out and must say i have learned a lot from Andy and he has given me the opportunity to listen for hours on end even when i wasn't buying anything and for that i am grateful to Andy. but i think the sales staff there got a bit soft and preferred a Wall Street guy with a bonus in his pocket vs. a person who wanted to do in home auditions. i pushed for some auditions in this recent buying spree and didn't get he coperation i wanted.

Overall, i agree with Myles - Andy was a pioneer in this field for NYC, he knew a lot and if you showed him respect he gave it back to you (usually in a customer oriented business it works the other way around - but that is Andy). i am sad he is closing and am not sure the lease is the real reason or not - not that it matters - side anacdote - i had one of Andy's sales guys giving me a 'special deal' which he could only hold for so long before the equipment jumped out the door - let's say 18 months later i bought that equipment at special deal plus...my point, i don't think the real high end equipment was moving over the last two years. having said that (sorry to ramble) i looked at his sales list and some of his high end pieces aren't there (Magico M5, Grand Utopias and Soulution gear, suggesting he has moved that equipment recently)