To the uninitiated, it is hard to believe that any hi-fi could cost £40,000 – let alone be worth it. But for Bob Stuart, the founder and chief engineer of Meridian Audio, the pursuit of the best possible sound reproduction has been a lifetime's work.
For this sceptic at least, he has achieved something rather extraordinary. Playing piano music, forexample, through Mr Stuart's CD player and speakers, you hear not only the notes, but also the pianist's fingers in the air over the keys. The orchestra is not in the room with you, you are in the orchestra. "We are building musical instruments," Mr Stuart says, eyes shining, more proud parent than businessman.
He is a slender, softly-spoken man, with a thoroughness that explores the tangents but never fails to get to the point. He is also disarmingly modest. "He's a legend in the audio world," a colleague tells me on my way out, "but you'd never know it if I didn't tell you." Mr Stuart's business is also an interesting phenomenon. Meridian Audio is a little-known success story of British manufacturing, an export-led paragon of the knowledge economy on the outskirts of Huntingdon, Cambridgeshire, which, by the end of next year, will have 12 shops, including in Kuwait City, Moscow and Bangalore. The company was born in 1977, the brainchild of Mr Stuart's engineering talents and the design skills of co-founder Alan Boothroyd. Since then, the pair have won a staggering 160 awards, with one early collaboration on permanent display at New York's Museum of Modern Art. But after three decades run by engineers, Meridian is now backed, via Reinet, a sister company of the luxury-goods group Richemont, which owns the likes of Cartier and Alfred Dunhill.
For Mr Stuart, his technical skills honed by a fascination with how we hear and process sound, the goal was always the music. "It all started for me with a love of music," he says. "I just wanted to make equipment that is nice to look at, easy to use and performs really well."
In pursuit of such a goal, Meridian produced the world's first "active" loudspeaker with built-in amp, and the UK's first CD player, now in its third generation. When the world went digital, Mr Stuart moved with it, not only building awesome movie-projector systems – one of which sells for an equally awesome £100,000 – but also pioneering a "loss-less" compression format which became the global standard for putting sound on DVDs and Blu-ray discs, and was subsequently sold to Dolby. The latest additions to the portfolio are an iPod dock and a touchscreen portal to access andorganise stored music.
If Meridian's achievements areimpressive on paper, the equipment in action blows your socks off. But the nature of the hi-fi market is such that, historically, Meridian was largely the preserve of the hobbyist elite. And, led by engineers focused on technical improvements rather than marketing strategies, there was no way to break out of the niche. The company didn't even have a marketing department. "We were a company built by engineers with sales based on the 'mousetrap theory'," Mr Stuart laughs. "If you put strong enough cheese in it, then someone will find it."
Meridian did well enough, particularly in economic boom times, exporting some 80 per cent of its output to more than 40 countries around the world. But it was no household name. The Richemont deal – brokered in 2007 by a Hollywood film-producer customer of Meridian's who saw the company's potential – has taken it into a whole new world. "We knew all about the technology but we didn't know how to communicate with the people who wanted to buy it," Mr Stuart says. "Richemont helped us learn how to sell high-value, luxury products to people who can afford to buy them."
The strategy is working. Sales have been growing at an annual rate of 10 per cent despite three years of restructuring and a recession that wiped 50 per cent off sales in the US, then the biggest market. The culture of the company has completely changed, Mr Stuart acknowledges, with a greater focus on customers and the distribution channel, and a product line pared back from 120 to just 35. But the biggest shift is geographical, with growth led by Asia and Eastern Europe. "The emerging markets are the places where a company like us, if we're smart, can make a great impact," Mr Stuart says. "We are a mature, respected brand which their aspirational consumers want to buy, and there is a more entrepreneurial spirit there, which helps."
Meridian is exactly the kind of business that the Government needs more of to rebalance the economy and boost Britain's long-ignored industrial base. After more than three decades in manufacturing, Mr Stuart is under no illusions. "The most important thing we can do is educate our children," he says, against the backdrop of the debate over tuition fees. A homegrown engineering graduate might still be hired over an American competitor, but both are in danger of being out-classed by rivals from the developing world, he says. "In these new markets we are seeing the difference the education system makes to the economy."
Apart from grudging acknowledgement of the R&D tax credit, Mr Stuart is dismissive of government assistance. "They have never done anything to help us," he says. "Even now they are doing nothing except talking in Westminster." If the government is serious, it should start with export-credit assistance to help companies finance overseas customers, and investment grants to help with equipment, he says.
Meanwhile, Meridian's 100-plus staff in the Huntingdon factory are getting on with the job in hand. Judging by what they are producing, Mr Stuart is not only an engineer, he is also an artist.
Sounds of success
* Bob Stuart set up Meridian Audio with Alan Boothroyd in 1977.
* As a child, he tinkered with electronics and went on to study electrical engineering and psychoacoustics.
* Meridian's first shop opened in Bangkok in November 2009. Another three – in Seoul, Mexico City and Santiago – have opened since, with five more due imminently. The first UK branch opens in Oxford next year.
* Products range from £1,000 for a pre-amp to £100,000 for a movie projector and speakers. The best-selling 808 CD player is £10,000, plus another £30,000 for DSP8000 speakers. Its biggest order was a £600,000 movie system for a Middle Eastern customer's boat.
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