Hall of Fame Richard M. Schulze
But the company was up against fierce new competitive pressures. President Nixon eliminated fair trade rules. "Transhipment became the order of the day," Schulze recalled. "Manufacturer goods were shipped all over the country, and consumers had access to goods typically reserved to the higher margin, higher service dealer."
As a result, the competitive advantage Sound of Music had enjoyed for 14 to 15 years "eroded away," he said. "I needed to make a change from the exclusive sale of audio components to young males to a more diversified strategy."
In 1981, a tornado tore the roof off Sound of Music's largest and most profitable store, located in Roseville, Minn. Lacking business interruption insurance, Schulze bought back the inventory from a liquidator; family members and employees retrieved stereos and TVs from surrounding parking lots and fields. Schulze's wife Sandy arranged for a tent and ran the register for a Sound of Music Tornado Sale that tied up traffic for miles around.