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Indie Sets Stage for Home Theater

14 Jun, 2005 By: Jessica Wolf

New Jersey indie retailer Scarborough Video has taken a big step into the future of home entertainment.

Recently, the store opened a high-end custom home theater business. In a separate room of the store, there is a projection screen, top-of-the-line sound systems, DVD hardware and even a couple of pricey home theater chairs for shoppers to sit in and enjoy a viewing while they get the sales pitch.

Employees will go out to interested customers' homes, evaluate and measure the home-entertainment space, and come up with a custom package, substituting plasma or LCD screens for the projection system, if needed.

It's not done on the cheap. The packages start at around $15,000 and go up as high as $60,000, said president Bob Marino.

For its home-theater sales, Scarborough focuses on offering, via special order, boutique-type hardware items not available on Best Buy shelves. The store also contracts an installment service to set things up in buyers' homes.

So far so good, Marino said.

“We've been doing it for about eight months, and we're encouraged by the interest,” he said. “It's not something you just throw out there. It's not an impulse buy. That's for sure.”

There's plenty of potential though, he said. On a $30,000 package, the store clears about $10,000, he said. Store employees can do special orders for single-item sales, too, if needed. Employees also use the space to educate shoppers about the fact that an analog-to-digital TV transition is impending, and they'll need an upgrade sooner or later, Marino said.

Of course, it's no small investment to get that kind of an ancillary business started, Marino said. A home theater display screening area like the one in his store could run $25,000 alone.

It's worth it for Scarborough Video, he said. It allows the store to cater to the store's upscale community near Princeton, N.J. And it's just one of the ways the 23-year-old store has approached the evolution of the industry. New businesses help ease the need to rely on the old rental model, Marino said.

“If you're relying on video rental, you've got a problem,” he said.

The store uses the home-theater setup to demonstrate other newer offerings. For two years now, Scarborough Video has been running an in-store, tape-to-digital service, converting customers' VHS home movies to DVD or producing custom discs personalized with video footage, photos and music.

For these custom discs, when the customer comes in to pick up the final product, they get a screening in the home-theater room. And, if they are planning on showing the disc at a party or gathering, they can rent out one of the three projection-screen systems Scarborough offers its customers. At $200 a day, these are in constant rental rotation, Marino said, and paid for themselves in just four turns.

The high-end home theater business is a tough one to crack, but all small retailers should look at supplementing their core business with a digital transfer offering, Marino advised. That side business adds an average of $12,000 to $15,000 to the bottom line per month, he said, not including corporate accounts.

Scarborough touts the service to all its renters by sending home an extra promo disc, produced by the store, on the digital transfer offerings. Any renter who mentions the disc and brings in VHS tapes to transfer, gets a discount.

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