|The retail property located at Bridge Road, Richmond is to be purchased by a medical facility, veteran owner Alex Encel, co founder of Encel Stereo, told CN. |
The offer on the property was too good to refuse, he said. The sale has already been finalised for an undisclosed sum.
The closure of the audiovisual specialist, selling AV brands like Cabasse, Polk and Sennheiser, in operation since 1951, will take effect sometime in January.
Encel says the real money is in his wholesale business, International Dynamics, which sells "ten times as much as a retail shop," something which a board member pointed out recently.
The veteran AV dealer will not be opening a new store elsewhere, citing massive cost of opening a new shop, which he estimated would be in the region of $1.5 million over 5 years, he says.
"It's a lot of time and commitment", says 79 year old who set up the Richmond shop back in 1951, who will now spend more time at ID.
"The industry is not the same as previous" says Encel, citing competition from the Internet "a combination of local and overseas" eroding profit margins.
"In the past, we had much higher margins", but online competition "has eroded margins drastically while costs have gone up".
The business recently cut overheads including advertising, and although sales fell, net profits rose, he says.
Consumers have changed and are now prepared to haggle, a regular mantra now is "I can buy it cheaper on the Internet".
However, Encel is philosophical about the closure of a business very close to his heart. If this happened 30 years ago, he would have been heartbroken, but says, "but life moves on" citing family and children.
|But he's not going into retirement any time soon, saying he will spend more time with family, and at International Dynamics, "that's where the money is". |
As for the AV retail sector, Encel thinks it will remain "stable".
"I don't see any reason why it should get any worse".
"The internet has been around for some time now", but says the industry is more dependent on global economy movements, citing China demand and possible fluctuations in the value of the dollar.