Reflections on Magnolia Hi-Fi, from someone who worked there 25 years.

Note: This article is in response to the February 12, 2009 announcement of Best Buy assuming direct control over Magnolia Audio Video and the subsequent closing of many of its retail locations.

There’s the danger of making statements of opinion sound like statements of indisputable fact. I want to be clear, upfront, that what you read here is strictly a perspective–one man’s take, unintentionally yet perhaps unavoidably tainted by the fallibility of memory and the melancholy of looking back on a big, important piece of my life.

But I was indisputably there. My first visit to Magnolia Hi-Fi was in 1974. I was so impressed that I applied for a job there. Not with a resume, but with a long personal letter to company owner Len Tweten. I ended up sending two. It took eighteen months to get an interview with his son Jim. I was hired in 1976, probably more for the reason that my future brother-in-law already worked there than from the fact that I had already been selling hi-fi gear for a couple of years. I felt like I had been admitted to Kennedy’s cabinet of the Best and the Brightest.

There were parallels between Magnolia Hi-Fi and Nordstrom: Both founded in Seattle by folks with strong Scandinavian roots, both family-operated businesses, both renowned even more for their high level of customer service than for the high quality of products they offered.

Len Tweten is one of the few people I’ve known who I would characterize as truly eccentric. All his customers seemed to revere him and all of the people who worked for him seemed to fear (and, admittedly, admire) him. To be dressed down by Len Tweten was akin to being sprayed with a verbal sand blaster. He had odd manners of language during those episodes, seemingly inventing new cadences of profanity, delivered always at Klipshorn volume levels.

Customers were correct about getting treated well at Magnolia Hi-Fi. Len gathered around himself people who shared his vision of prosperity through people-pleasing. He gave his employees the authority to act independently to solve problems. He bristled (and sometimes exploded) at the suggestion of putting together a company policy manual. To Len, doing the Right Thing for his customers came naturally. But it has to be said that for us–his employees–the greatest incentive was avoiding the Wrath of Len should one of your customers call him with a complaint.

Len and Jim were both gamblers, and their willingness to take risks was unquestionably a key factor in Magnolia’s success. For example, they took chances by choosing to carry what were, at the time, audacious products, such as a $1000 cassette deck (from a hitherto unknown company called Nakamichi) and the first projection television (the Advent Videobeam). Bob Carver came first to Len Tweten with the prototype of what would become the world’s first super high-powered amplifier (the Phase Linear 700). Jim was instrumental in convincing his father to gamble on more locations in the Seattle area. These new stores were often staffed by ex-employees of other CE stores that had gone under while trying to compete with Magnolia.

Sure, there were some losing hands, but they’re not worth much of a mention. There were the troubles that inevitably accompany growth–communication problems mostly. And there was the issue of erosion of company culture. Again, this was in parallel to Nordstrom. During the time when it was a regional (Pacific Northwest) player only, Nordstrom had a relatively easy time hiring salespeople who understood The Nordstrom Way, as the company often simply hired people who had been life-long customers. That became tougher to do when the company expanded into new markets. Magnolia experienced similar challenges when opening stores in Oregon and California.

The really big payoff for the Tweten family of course was Best Buy’s acquisition of the company in the fall of 2001.

Personally, I wanted to believe the propaganda I was fed by Best Buy–that they bought Magnolia because of what it was, that they recognized a winning formula and didn’t want to alter it (much). And to this day I feel certain that–at that time–they believed it also.

But I was in a position, as Director of Advertising, to be in daily contact with “the hive” (BB HQ, then in Minneapolis suburb Eden Prairie) and, abetted by my natural cynicism, I was aware of significant changes almost immediately. I won’t bore you with the details, but suffice it to say that the primary responsibilities of my position changed gradually but inexorably from creating advertising to pouring over spread sheets. Eighteen months after the acquisition, I left. (Postscript: Magnolia’s “in house” advertising department lasted another year and a half or so after my departure before it was entirely eliminated.)

Funny. To many observers, the “Golden Age” of Magnolia Hi-Fi was the stage where it operated around half a dozen stores. Last week, Best Buy announced the closing of seven out of thirteen stores. Two of the remaining stores are also among the oldest. It appears at this stage that Best Buy is content to allow these few stores to continue, albeit with direction coming now solely from Richfield, Minnesota. (We’ll see.) Perhaps a retail model such as this is intrinsically limited in terms of scale, like a complex wristwatch that can’t be mass-produced and still maintain its quality and specialty.