#DigitalSkeptic: Headphone Story Sounds Like Bricks-and-Mortar Retail Rebound

NEW YORK (TheStreet) -- In Bozeman, Mont., at least, the future of music retailing has nothing whatsoever to do with the Internet.

"I got tired of watching the decline of the music business," Jamey Warren, CEO of headphone and portable audio retailer Headroom told me over the phone from the cozy college town on the edge of Yellowstone National Park. "I wanted to have a place to go down and experience music like my old favorite record stores."

"But to do that these days, you have to be selling headphones and personal audio and not CDs," Warren said.

Before investors dispatch this ex-sax player as a retail romantic, keep in mind that Warren's Headroom runs one of the oldest and most established online headphone retail Websites, Headphone.com.

"We started 22 years ago as a catalog retailer for audiophiles looking for the best possible headphones," says Warren, who took over as CEO in January 2013 but has been with the firm for north of a decade.

During that run, Headroom catered mostly to a clientele that demanded the best in custom amps and headphones and, most important of all, honest product reviews. "We were out there selling $1,500 headphones. You can't be afraid of taking a stand on products no matter which vendors you angered," Warren said.

For most of this millennium, this audiophile-first strategy kept Headroom on the breaking Web commerce wave. The operation grew to nearly two dozen employees as it expanded its custom headphone amp line and ramped up product testing. But by the 2008 economic collapse, other equipment makers pushed into the firm's core amp business, and the explosion in low-cost mobile headphones ate deeply into Headroom's lucrative retail revenues.

"We were looking for new ways to grow," Warren said. "We made the gut decision that the best way to sell a headphone was to get a great one on a customer's head."

"So we found the perfect location downtown, and opened a retail store."