When Bernard Chiu sold his successful home-appliance company Duracraft in 1999, he planned to spend more time on the golf course and with his family. But in 1998, he was asked to take a leadership role in a new musical-instrument company that was just getting off the ground, First Act.
“At first, I didn’t want to be a part of it,” said Chiu, 51, CEO and chairman, First Act. “But then I remembered how much it cost to buy my first guitar. I wanted to change the industry by creating a new channel of distribution and put guitars into more hands.”
The company was founded with the idea of developing affordable, but high-quality guitars that would be sold in places where people shop everyday.
“I thought, ‘How many people think about going to a guitar store to buy a guitar on a daily basis?’ If you put one in a place where they shop everyday, the product gets so much more exposure,” Chiu said.
The challenge, however, was that big-box retailers were not all that interested in carrying guitars. Some had tried, but had little success. Chiu rethought the company’s strategy and launched a musicalinstrument line created specifically for children. The instruments were designed to make learning how to play fun, as opposed to a chore.
“It took off right away,” he said. “Customers loved it and we created a new category—and new revenue opportunities—for retailers. Because the children’s line was a success, it gave us the opportunity to go back to the retailers with an adult line.”
In less than 10 years, First Act has evolved into one of the nation’s leading manufacturers and marketers of musical instruments, with a diversified product lineup that includes guitars, drum sets, amplifiers, hand-percussion instruments and related accessories. Whether a person is a beginner or a big-time rock star, First Act can meet their needs. It sells direct to consumers on its Web site, and also supplies such chains as Toys “R” Us, Target and Wal-Mart. Its product offerings include beginning instruments for children, band instruments for school music programs and limited edition and customized guitars.
In 2005, the company opened its first freestanding location, First Act Guitar Studio, in Boston. The store celebrates the artistry of guitar making and invites customers to play any guitar that catches their eye. It includes a glass-enclosed space where visitors can watch a craftsperson put the finishing touches on a custom guitar. It also offers guitar lessons and live performances by major artists.
Chairman and CEO First Act BostonAnnual sales: $100 million (2006)Type of business: Manufacturer and marketer of musical instrumentsNumber of stores: OneAreas of operation: Global
“It’s a concept store that serves as a repository for people to come in and test products,” Chiu said. “We use the store to gather customer feedback for product development.”
The Boston location, Chiu added, is the first of 10 to 12 stores that the company plans to open in major markets across the country.
“They will be living advertisements that allow consumers to experience our brand in a truly interactive way,” he said.
Chiu, who grew up in Hong Kong and moved to the Boston area in 1983, hopes to continue to grow First Act.
“Our goal is to continue to make great products and new categories for retailers and consumers of all ages, from babies to rock stars,” he said.
Chiu has left the days of retirement behind, at least for now. But he still makes time for his family and golf.
“It’s hard to find a balance between work and play, but it’s important to make time for everything you love,” he said.