One big reason why brick and mortar high end audio dealers struggle.

The Rose Hill Alehouse down the street went out of business because they didn’t pay their liquor license. A long time employee said no it was because they weren’t paying their unemployment insurance. Ran into one of the owners told me the landlord jacked the lease when it came due. They were doing so much business it was hard to find parking. Another one said the partnership wasn’t working out. This is a place I was in on a regular basis right down the street from where I live. Every single one of the stories I heard had a lot of validity. Take your pick.

All I know, the market has bifurcated. You can see it even just looking at the one example. Definitive Audio used to cater to guys like me looking around trying things out maybe find something worth buying every once in a while. They did some install and sold some big systems but they had "us" covered as well. Gradually they shifted higher and higher until one day I go in and see a system that was $1.3M. Yes, million. And they kicked me out of the room saying they had to get it set up for a customer. Because, to them I am no longer a customer. See how that works?

Magnolia the space was turned into a CityMD where I actually worked for about a year. (Now CityMD is gone.) All that whole time the SpeakerLab store sat vacant, the algae-streaked SpeakerLab awning still advertising what had been. Those two catered to what used to be the great mid-level high end market. So now we have Definitive selling million dollar turnkey systems to Microserfs and Goolagers, and Hawthorne selling used and affordable entry-level gear intended for your typical apartment or corner of a living room type setup. Huge gap between the two which is really sad.

But as to why? Might as well ask the Alehouse bartender, probably has as good a guess as any.

@chorus - I live in San Francisco, and I enjoy popping into Music Lovers on occasion. You are incorrect however as to its location - it's not in downtown SF, it's over by the Fillmore. I like the 'by appointment' shops, too. Not a big deal to make an appointment, and you get to spend a lot of time there. The other place has tons of gear, but in addition to charges for auditioning, they are far from the friendliest hi-fi dealers in town. The Music Lovers guys are great. 

are the high end stores that have survived this far actually struggling ? ... in any of the stores I'm a "regular" I certainly wouldn't think of myself as a customer in a $1.3M system room they were setting up for an actual customer for the system...I would expect to be politely asked to leave !!!

I buy gear on the used market. If I were to buy new,I would definitely buy from a local shop.  Because I KNOW I'm buying used,I can't justify going into a shop,and knowingly waste someone's time. I would rather buy blind than do that. I worked retail sales in the past,and that is not a very good feeling to have someone walk in that you know isn't going to buy from you.  

All of the excellent stories above serve to illustrate in technicolor the dilemma faced by anyone trying to sell music retail. Back in the day I sold pianos and organs at one time and then hifi gear at another, and I confronted the contradiction. Even remaining record stores have to face it all the time. I’ll describe two intolerable situations:

1) A music/instrument/hifi store is being run by just 2 or 3 people, all of whom are busy with customers or housekeeping chores. None of them are making much above minimum and all of them have been there since 9AM when two people walked in and then left without buying anything. The phone rings occasionally but who’s to answer? If they’re on commission, they may not have had a paycheck recently or have run up a tidy debt to the boss to repay the "draw" they've been paid against future earnings. I figured out that a commissioned salesman in a failing store will inevitably earn what amounts to belowa minimum wage! "This isn’t a concert hall!", I remember a colleague spitting after spending 2 hours with a classical lover who left without buying anything. Playing a Steinway or a Hifi for a half-hour to entertain a man whose wife is in a nearby store rubs the wrong way. The inevitable result is retail burnout. It occurs to sales staff in any retail business and unfortunately afflicts long-term employees first. Then the infection spreads and turnover results. I had a sales manager in a high-pressure TV store tell me, "Nobody drives all the way down I-35, looks for the turnoff, negotiates the access road to the parking lot and then walks all the way across that lot to get to our store just ’to look’!"

2) A customer walks into a music store to buy a few accessories and look at a possible new pre-amp plus advice. Should he go tubes? Separate power supply? But everyone is busy: in the back, with a customer, cleaning up Aisle 6, in the loo. Finally he is offered a fixed appointment to play the Steinway, or the new Magicos at leisure the following day.

Who’s wrong!? It’s a cycle of abuse. Any really experienced retail salesperson will gladly ask you to "Walk a mile in my shoes." This dilemma exemplifies the tensions that have accellerated retail’s nosedive. RETAIL BRICK/MORTAR HIFI IS DEAD!!
D-E-A-D! When the customer/salesman relationship turns adversarial, it’s all over! This does not bode well for a nation experienceing late stage capitalism.

The slope is slippery and we’ll see how steep. Only the Golden Rule can save us!