In 1980, a chemical engineer by trade named Alex Kivritsky fled the U.S.S.R. iron curtain for a better life in Canada. Alex and his wife were in their early 30s and in a twist of fate, Alex sold his treasured audio gear to secure the money for the family’s exit from Soviet-occupied Ukraine with their eight-year-old son Igor. The Kivritsky family immigrated to Vancouver and within four years, Alex had established his own audio retail company that he named Hi-Fi Centre. Four decades later, Hi-Fi Centre remains the premium audio retailer in Vancouver and surrounding area, now managed and operated by Alex’s son Igor.
Hi-Fi Centre is a great Canadian success story and an example of succession and family business done right. Earlier this week, we had a chance to sit down with Igor Kivritsky to discuss some of the magic that has allowed Hi-Fi Centre to flourish for 40 years. The shop at 23 West Pender Street in Vancouver is an institution and arguably one of the most beautiful audio stores in Canada. Below is our conversation with Igor on what keeps Hi-Fi Centre at the forefront of audio retail excellence in Canada.
Let’s start by talking about family businesses. What would you say are some of the characteristics that must be in place to make a family business a success?
While family business will mean something different for every family, in our case, it allowed us to really speak freely and voice our opinions openly. I knew that my dad would never fire me, and my dad knew that I would never quit, so it allowed us to be far more open and to speak honestly. The other side of that is, well let’s just say we have had some spirited debates and heated conversations. But we both knew that we could passionately express our side of what we were fighting for, and even if things got testy, once the conversation was over, we were just back to business.
With the passage of time, I can see that my dad was often right in his thinking, when I was being a scrappy young punk! Of course, heated debates are really a thing of the past, but I don’t think it may be as easy for non-family businesses to be able to speak as freely or openly for that matter, especially without the fear of consequence like being fired or not promoted. Having had the opportunity to challenge and question my dad back in the early days has certainly helped create the Hi-Fi Centre culture of where I want my team to be able to speak freely and openly to me with the same confidence that it won’t be held against them.
Your father Alex started Hi-Fi Centre in 1984 in a 1600 square-foot original location. What was your father doing before he started Hi-Fi Centre and what were you doing?
I come from a family with a rich history of academics. In fact, most of my extended family members are professionals. My dad was a reluctant chemical engineer in Ukraine but not passionate about his career. Remember, Ukraine was behind the U.S.S.R. iron curtain when we moved to Canada in 1980. Even back in the day, my father was passionate about music and sound systems and even in a Communist country, he had a knack of being able to obtain a great sound system. As typical with most families that immigrate, my parents had friends that had moved to Vancouver four years earlier who said they would help us within the community if we were ever to make the move. Vancouver sounded beautiful and in an ironic twist, my father sold his audio gear to get the money to help us get out of the country. When we came to Vancouver, I was eight years old. My parents were in their mid 30s and pretty much penniless when we finally arrived in Vancouver.
My dad did some odd jobs in Vancouver, working on his English language skills, but then ended up working at Sight & Sound, one of the first Vancouver audio shops. He had a knack for selling and worked his way up to store manager. In 1984, he had an idea for an audio shop that was more high-end than Sight & Sound and that’s how Hi-Fi Centre came to be. In fact, my dad’s partner at the time of opening was the owner of Sight & Sound. A few years later, my dad bought his partner out and it’s been a family run business ever since.
Your family had been in Canada for four years and you already had your own business. That’s impressive!
Even crazier is that my dad opened our first location two doors down from another Vancouver institution called A&B Sound. We now know that’s called cocooning and creating a destination shopping area, but to think he opened up next to the most established audio retailer in the city! That first Hi-Fi Centre location was 1,600 square feet and the total investment in 1984 to open the shop with inventory was $30,000!
Naturally, Hi-Fi Centre could not carry the same brands as A&B Sound, so my dad sought out fairly unheard of British brands for the day such as Mission, Cyrus, and Mordaunt Short. I believe we were also the first Rotel dealer in Vancouver. You know, today I have brands knocking on my door all day long hoping that we will carry their products, but back in the 1980s, my dad pretty much had to beg brands to let him carry their products. How times have changed!
Of course, being a new and fairly small shop we had no money for advertising, but A&B Sound did. Every week, they had their flyer with sales and offers, that brought customers down to the area and as was typical before making a big purchase, customers would see Hi-Fi Centre two doors down and pop in to have a look. We owe a huge debt of gratitude to A&B Sound for generating that first year of customers. And of course, once we had them in the shop and did our demos and explained the brands, we started making a name for ourselves.
When did you know that audio was your calling, and that you were going to join the family business?
The store opened in 1984 when I was 12 and as a young boy, I was always at the store trying to help in any way that I could. I just loved being around the gear and the staff so I would stack boxes and answer the phone and do anything else I could do to help and not get in the way, from a really early age. I was never a good student, but I was a good writer and a natural communicator. As I learned the ropes of the store, I started speaking more with customers, not as a salesperson but as a greeter.
My dad knew that university was not in my future and as high school was coming to an end, he took me to lunch where we had a conversation about me joining the business. He gave me the opportunity to join the company knowing that as I progressed and learned the industry, that eventually the company would become mine. I have been running Hi-Fi Centre since 2012 and while my dad is no longer actively involved, we still talk every day about the business and how things are going. He is still a shareholder and will always be a shareholder. While he stays active within the community and has local broadcasting ventures, he enjoys his life without the day-to-day pressure of running a business, but we are still very much partners.
You are famously known for retaining staff, some of which have been with you for 10 or more years. That’s amazing. How do you manage to do that?
I hate starting with a cliché, but we really do treat our staff as family. Well, maybe I should call it a dysfunctional family, but it is a family nonetheless! We have always believed that anyone who works at Hi-Fi Centre should be paid as best as possible and also have the freedom to express themselves, which of course goes back to where I had freedom to do just that with my dad when I started with the business. We have never run the company like a rigid corporation that is aggressively focused on forecasting or sales targets. If we can create an environment that is friendly, respectful, and fun, then we have succeeded in creating a place where people will wish to stay. We have staff that have been with us for decades and more often than not, when people leave, its because they are retiring.
Hi-Fi Centre carries some of the finest and most expensive audio brands in the world. How do you balance serving the needs of the hard-core audiophile without making the store feel intimidating to say the recreational audio enthusiast? My guess is that both ends of the customer spectrum are equally important.
Both ends of the spectrum definitely matter, and the person with a $1,500 budget is treated in the same way as we would treat a customer with a $150,000 budget. But at our core, we are a high-end focused shop. We have gone upmarket over the years to parallel the client base that we serve and our sales of mid-fi where we began, has actually declined. The irony is that to create a beautiful sounding system when a customer has a budget of $150k is actually pretty easy. The smaller budgets are more of a challenge, simply because we are confined to a price.
As we all know, the middle class in Canada continues to get squeezed, and I don’t think it really was our intention to stop serving the middle market, it’s just that there are fewer and fewer of them coming into our store. Our pivot has been to carry the products that match the customer and in Vancouver, Whistler, the Gulf islands and even interior B.C. that’s been a high-end customer. You can never be everything to everyone, that’s just not possible. But you can still make a lot of people happy, and Hi-Fi Centre welcomes anyone who comes through our door. Our closing ratio of customers served to customers who have purchased is insanely high, and that only happens when customers feel welcome, regardless of their budget.
In the three-plus decades that you have been in audio retail, how has the client changed?
Let’s face it, Vancouver is a challenging place to live if you don’t have the means. There is a lot of foreign wealth in the lower mainland, and geographically, Vancouver being surrounded by ocean and mountains, means housing will always be limited and therefore incredibly expensive. So, as we talked about earlier, higher incomes mean higher end gear, not always but often.
The customer today has an incredibly high level of knowledge that comes from publications, social media, YouTube, blogs, and so many other access points that didn’t exist when Hi-Fi Centre started. So, the customer has a pretty good idea what they want and then we fine tune that vision. The consumption of music has never been easier with streaming services so that drives a new passion. I guess the way the client has changed is that their budgets are bigger, their knowledge is greater, and their love for music and entertainment is solid.
Often, audio enthusiasts look for the rare and not so common brands to distinguish themselves from their peers that embrace legacy brands. How do you decide on what brands to carry? Are there brands today that you are particularly excited about?
In the early days it was about distinguishing ourselves with brands that many had not heard of. We talked earlier about British brands that we were instrumental in opening in Western Canada when American brands were usually the most popular. Many of the brands that we carry have been in the store since the mid-’80s, early ’90s. Brands like Naim and Bowers & Wilke
We always look for best-in-class products such as our relationship with JL Audio that is now represented by Gemsen in Canada. We recently did a home installation for a tech entrepreneur with a passion for electronic dance music. The mandate that we were given was that the system had to compete with the best sounding night clubs. Naturally, to reach that type of sound, we turned to JL Audio Gotham subwoofers. We could not have been prouder of how that project turned out.
What would you say is the percentage break between the business Hi-Fi Centre does via in-store retail, online retail, and residential custom?
Our business is 90% in-store, which includes our residential projects and 10% on-line. Now, 10% may sound like a small number, but a few years ago, it was less than 5%, so it has doubled. Our culture is to be client-facing and even when it’s an online purchase, chances are there is still dialogue with the customer. Part of our online growth is by serving parts of Canada that simply don’t have a local shop that carry the brand selection that we carry. Vancouver Island, for example, has become an incredibly important market for us, and sometimes a customer reaches out to us because they don’t have a local shop to serve them. Other times, we already have an existing relationship, but we are now outfitting a second home like a beach house in Tofino, a ski chalet in Whistler, or a vineyard in Kelowna. Then there are local sales where a customer just doesn’t want to spend an hour in traffic so orders online. We actually do the majority of local deliveries personally.
Are you feeling optimistic that the industry of high-end audio has a future?
The audio industry has only one way to go and that’s up. Whether it’s listening to music, making music, or discovering music, we are in the golden age for access and with the consumption going up, people need a system to enjoy that. It could be through a pair of headphones or a full-blown system. Customers today are sophisticated, and they expect great performing gear. I am really optimistic for the future of the industry and Hi-Fi Centre.
There used to be an old saying that the biggest problem with the audio business is that there were too many brands chasing too few dealers to serve not enough customers. Today the number of brands has shrunk, the number of dealers has declined, but the number of customers has grown, and how they interact with you has changed for the better.
The same goes with distributors. A couple of decades ago, there were pages and pages of distributors. Now we deal with a handful. If I can have a great relationship with six or seven distributors, that just makes my life so much easier. Our vendor relationships are built around doing business with people that we like and some of those vendors we have been working with for close to 40 years. While our relationship with the distributors can last for decades, the people who represent the distributors can obviously change over the years. Having someone like Edit Cantor from Gemsen, who suggested that we have this conversation, is an example of working with a person that makes our job so much easier.
So as the guy who can have any audio component he wants, will you share with us what you have in your home!?
Well, it’s a bit of a revolving door, not as much anymore but I used to swap out my components all the time. I am incredibly lucky to be married to a woman who loves audio gear as much as I do and is just as happy as me to have floor standing speakers and multiple components on display. There are a few products that I will never swap out and they include Sonus Faber Stradivari speakers and Linn Klimax DSM streaming DAC. I find there is a great synergy pairing Sonus Faber and Linn. We are in the process of building a house that will have a media room focused on Bowers & Wilkins and Marantz. I do not subscribe to the “cobbler’s kids have no shoes” mentality, and I definitely live the audio life. We work in a really fun industry!