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#184414 - 11/16/07 06:53 PM Bosendorfer has been sold!
Zormpas Offline
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#184415 - 11/16/07 07:49 PM Re: Bosendorfer has been sold!
Furtwangler Offline
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Registered: 02/22/07
Posts: 1543
Loc: Danville, California
This will certainly position Brodmann nicely and add a great deal of credibility to their entire enterprise.

Apparently these guys are well-funded and mean business!

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#184416 - 11/16/07 08:07 PM Re: Bosendorfer has been sold!
doremi Offline
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Registered: 04/06/07
Posts: 1758
Boesendorfer was sold for a mere pittance (11M Euros), about 21 pianos of their most expensive model (Swarovsky).
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#184417 - 11/16/07 08:09 PM Re: Bosendorfer has been sold!
turandot Offline
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Registered: 01/27/07
Posts: 7305
Loc: torrance, CA
I think Brodmann already had some credibility. Who knows if gaining more is worth the accumulated debt that Boesendorfer brings to the table? Time will tell.

Yamaha will probably have other opportunities.
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#184418 - 11/16/07 08:23 PM Re: Bosendorfer has been sold!
Norbert Online   content
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Loc: Surrey, B.C.
We 'knew this' for a while.

Always get a funny feeling when a national warehouse is suddenly emptied out with next containers virtually sold ahead of time..... \:o

Norbert ;\)
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#184419 - 11/16/07 09:02 PM Re: Bosendorfer has been sold!
yamaha cfII Offline
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Registered: 11/16/07
Posts: 2
Loc: tokyo, japan
at least with the Yamaha company they would have vast finanacial help in the years ahead. Broadman is only a piano with invented name from China.
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#184420 - 11/16/07 09:41 PM Re: Bosendorfer has been sold!
Norbert Online   content
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Brodmann is not an 'invented' name but finds its [common...] roots in the company they just bought.

Unintelligible perhaps for some in other parts of the world, European history is often very intertwined and interwoven.

To *which degree* - admittedly - may be a different question.

Norbert
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#184421 - 11/16/07 10:52 PM Re: Bosendorfer has been sold!
Axtremus Offline
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Registered: 08/29/03
Posts: 6186
 Quote:
From the article:

Brodman Pianos, run by a former Boesendorfer sales manager, paid just under 11 million euros (16.1 dollars[/b]) for the ailing piano manufacturer, media reports said. In 2006 Boesendorfer reported losses of 2 million euros. Its debts are estimated to be around 8 million euros.
Only 16.1 dollars?!?! ;\)

Actually, with 8 million Euros of debt, that bumps the value of the deal to 21 million Euros, about half of Steinway's quarterly revenue.

Any one knows how well capitalized Brodmann was, prior to the acquisition? Just curious.
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#184422 - 11/16/07 11:06 PM Re: Bosendorfer has been sold!
Ori Offline
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Registered: 11/20/04
Posts: 1703
Loc: Stamford CT, New York City .
Bosendorfer’f former executive Mr. Christian Höferl headed the group that was bidding for Bosendorfer, and according to the article bought the company.
I believe that the Brodmann piano was Mr. Hoferl’s “baby” while at Bosendorfer.
At the time, Bosendorfer thought of introducing the Broadmann as a less expensive piano, in a similar way to what Steinway did with the launch of the Boston and Essex lines.

When Christian Hoferl left Bosendorfer a few years ago, he apparently took the Brodmann project with him, and continued its development and marketing while building it mostly in China.
Brodmann pianos, in their modern incarnation, have only been produced for the past few years.

Once Bosendorfer was out for sale, Mr. Hoferl and the group he headed, placed a bid on Bosendorfer.
The group and the company is based in Austria and is considered local, the bid apparently was under the name of Broadmann pianos.

It is not a take over of the Bosendorfer Company by a foreign manufacturer, but rather the decision was apparently made to keep it in European/Austrian hands.

In short, it would be accurate to say that the Bosendorfer piano company was sold to a group of investors headed by former Bosendorfer executives, who developed and ran Broadmann pianos in the last few years.
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#184423 - 11/16/07 11:27 PM Re: Bosendorfer has been sold!
Grane Offline
Full Member

Registered: 02/12/05
Posts: 430
Loc: Greater Miami
Thanks Ori.

This scenario will be interesting to watch as it unfolds and we see what kind of owner Brodmann really is.

Perhaps this one will be a harbinger of future deals...
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#184424 - 11/16/07 11:36 PM Re: Bosendorfer has been sold!
turandot Offline
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Registered: 01/27/07
Posts: 7305
Loc: torrance, CA
Brodman.........Brodmann.........Broadman.........Broadmann?

There are so many misspelled references to Brodmann on the net that you can get google hits on the misspellings as well as the real name. Even Zormpas' news source got it wrong.

BTW, if anyone (swampwiz perhaps) would care to send a congratulatory e-mail to Mr. Hoeferl, his direct e-mail link is on the Brodmann website opening page. \:D
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#184425 - 11/16/07 11:50 PM Re: Bosendorfer has been sold!
Axtremus Offline
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Registered: 08/29/03
Posts: 6186
My speculation:
  • Brodmann Pianos "merges" with Bösendorfer.
  • Brodmann-branded pianos carry "By Bösendorfer" verbiage on every fall board thereafter.



;\)
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#184426 - 11/17/07 12:21 AM Re: Bosendorfer has been sold!
curry Offline
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Registered: 08/17/02
Posts: 3769
Loc: Hamilton Twp, NJ
Not a chance Ax.
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#184427 - 11/17/07 01:02 AM Re: Bosendorfer has been sold!
inlovewithit Offline
Full Member

Registered: 11/08/07
Posts: 79
I wonder how this will effect quality of Bõsendorfer pianos?

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#184428 - 11/17/07 01:44 AM Re: Bosendorfer has been sold!
Norbert Online   content
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The history of every great maker has always been based on a healthy blend between quality manufacturing and and the required business acumen to market such product.

When companies did only the one,without the other,they eventually failed.

In the case of the new CEO's of this company, Christian Hoeferl and Colin Taylor, Brodmann Co IMHO has acquired this pefect and essential balance to certainly succeed in the future.

Norbert
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#184429 - 11/17/07 01:49 AM Re: Bosendorfer has been sold!
turandot Offline
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Registered: 01/27/07
Posts: 7305
Loc: torrance, CA
Hi Norbert,

Even so, this is hardly a growth industry and a fledgling company assuming a debt-ridden small production maker does have some peril.

What's that old song.....

Catch - a - fal - ling - knife - and - put - it - in - your - poc - ket....
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#184430 - 11/17/07 02:06 AM Re: Bosendorfer has been sold!
Norbert Online   content
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Registered: 07/03/01
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Loc: Surrey, B.C.
Well,people might say all kind of things at this point.

Since ourselves becoming Estonia dealers some 10 years ago, the nay-sayers and dooms-dayers have certainly had their run and expressed their opinions.....

If empty national warehouses and all stock suddenly [pre]sold are any kind of indication, I would certainly say that for any maker, this is a fairly exceptional situation, particularly now at a time, which has been described by many as a "shrinking market"

Anybody who ever met Mr. Hoeferl and Mr.Taylor in person would hardly get the impression that these two belong to some kind of obscure, self-inflicted, i.e. masochistic victim type help group.

"Help" one might argue, is required perhaps more elsewhere and by others.

"To keep up with things" and - "the rapid course of events and developments right now in the industry".

Norbert \:o
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#184431 - 11/17/07 08:50 AM Re: Bosendorfer has been sold!
Starting Over Offline
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Registered: 02/07/06
Posts: 1290
Loc: Toronto
 Quote:
The history of every great maker has always been based on a healthy blend between quality manufacturing and and the required business acumen to market such product.

When companies did only the one - without the other - they eventually failed.

This is, of course quite true. But improved marketing, while necessary, will not be sufficient to bring Bosendorfer back to financial health. Also required will be changes in the manufacturing process enabling Bosie to make pianos which can be sold for more than it costs to make them. This, based on their finanacials, is not currently the case despite their stratospheric pricing.
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#184432 - 11/17/07 09:30 AM Re: Bosendorfer has been sold!
Piano*Dad Offline
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A heavily indebted company with a negative net cash flow ....

Brodmann seemingly bought two things, the capital stock of the company (small potatoes, esp. since the debt came with it) and the name of the company ....i.e. intangible capital. It's anyone's guess what the worth of that intangible capital is in the hands of a new owner.
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#184433 - 11/17/07 09:35 AM Re: Bosendorfer has been sold!
Keith D Kerman Online   content
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Registered: 03/12/03
Posts: 3349
Loc: Gaithersburg, MD (Washington D...
 Quote:
Originally posted by Axtremus:
My speculation:
  • Brodmann Pianos "merges" with Bösendorfer.
  • Brodmann-branded pianos carry "By Bösendorfer" verbiage on every fall board thereafter.




;\) [/b]
Actually, it will be the Bosendorfer fallboards that will read "by Brodmann" from here out. ;\)

The entire team running Brodmann were former execs, conert technicians, and heads of QC and manufacturing from Bosendorfer. It is a very sharp group, and this is very positive for Bosendorfer's future. The entire piano industry will be watching closely to see how they turn Bosendorfer around.
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#184434 - 11/17/07 11:08 AM Re: Bosendorfer has been sold!
Rich Galassini Online   content
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Registered: 05/28/01
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Loc: Philadelphia/South Jersey
Just a few minor points:

Keith is absolutely correct. I have known Christian for years. He is well educated, well seasoned, and very professional. I expect very good things.

Also, he was[/b] directly involved in the Brodmann project while with Boesendorfer (although there was no "name" when we spoke of it then). When he left the company there was no other interest in developing this project at Boesendorfer, so it was free to be picked up by Hoeferel.
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#184435 - 11/17/07 12:19 PM Re: Bosendorfer has been sold!
Norbert Online   content
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I happen to agree here too.

There is much more to the story than is commonly known.

When Hoeferl was at Boesendorfer, he recommended many changes which were never followed through or even taken serious [by brass then..]

The man was clearly ahead of his time, brimming with ideas and strategies this, in addition to the incredible know-how and connections he had [and has...]in the industry.

To pull off the Brodmann line in such a short period of time is clearly evidence of some stroke of genius.

Better stay tuned what's next - very curious myself...

Norbert ;\)
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Greater Vancouver B.C. piano dealers for : C.Sauter, Estonia, Brodmann, Ritmuller
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#184436 - 11/17/07 06:03 PM Re: Bosendorfer has been sold!
ftp Offline
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Registered: 09/10/05
Posts: 2365
Loc: Philadelphia
I think Ori explained it right. Strategy looks very similar to Steinway in many ways- protect the venerable brand and integrity and allow for growth in low and mid markets with a low production cost piano. Would be interesting to compare the strategies of Steinway and Brodmann more broadly.

Seems like this is what Bosendorfer wanted to do in the first place but couldn't afford and now we have it, only with a new owner.

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#184437 - 11/17/07 06:11 PM Re: Bosendorfer has been sold!
kenny Offline
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Registered: 05/29/01
Posts: 7051
So what happened?
Are there not enough Bosendorfer customers to make a profit, even at those prices?

Is the idea to lose money on every Bosie sold but subsidize the losses by the parent company also selling lots of cheaper pianos, then try the "synergy" thing like Kimball did, but saying there is a little Bosie magic in every Brodmann?

Are there just not enough customers any more to support this many Tier 1A manufacturers?

I don't get it.
If too few people are willing to pay $120,000 for product X what difference will new owners make?

They can't really claim that they are going to raise the quality of what is already billed as the world best and most expensive piano.
What would that say about all the Bosies on the sales floors today.
And they can't raise prices to turn a profit, can they?
This is all so delicate. \:\(

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#184438 - 11/17/07 10:40 PM Re: Bosendorfer has been sold!
I. Bruton Offline
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Loc: Raleigh
I'm curious, why did Yamaha have an interest?
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#184439 - 11/17/07 11:12 PM Re: Bosendorfer has been sold!
Norbert Online   content
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Registered: 07/03/01
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Loc: Surrey, B.C.
Only a manufacturer with great stakes in the industry, including strong future ambitions -including China itself - would understand this.

Huge cache of and incredible access to designs, top people in the industry, 200 years of experience,top notch industry connections, including a network of elite dealers,you name it.

No doubt the new owners will take full advantage of this and build a 'new-market-network' for themselves straight from there.

We should all be in for very interesting times...

Norbert
_________________________
www.heritagepianos.com
Greater Vancouver B.C. piano dealers for : C.Sauter, Estonia, Brodmann, Ritmuller
604-951-8642

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#184440 - 11/17/07 11:41 PM Re: Bosendorfer has been sold!
kenny Offline
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Registered: 05/29/01
Posts: 7051
 Quote:
Originally posted by I. Bruton:
I'm curious, why did Yamaha have an interest? [/b]
Image

Association with Bosendorfer would improve their image.

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#184441 - 11/18/07 04:21 AM Re: Bosendorfer has been sold!
swampwiz Offline
500 Post Club Member

Registered: 03/07/07
Posts: 562
Loc: Louisiana, USA
I find this happening interesting for 2 reasons:

First is the fact that a venerable, super quality manufacturer (arguably the best in the world) is worth only $20M. This proves how much of a niche product that highly refined pianos are, and that as an investment, piano makers are a lot like airlines.

The second, of course, is that BrodmaNN did the buying. This is really nothing more than Brodmann gaining a showpiece product (like the 'Vette for GM) to highlight its regular line. Brodmann can now claim directly (it could always claim indirectly through the heritage of the managers, something that would be lost to the typical customer) that Brodmann and Bösies are really cut from the same lineage, just that Brodmann is built and marketed to the masses. Now every Brodmann dealer can get a super expensive Bösie (probably only an upright, unless it is big enough so that it can park a grand) and rave about how it is the best piano in the world, but oh by the way, here is a much less expensive version of the same.

There isn't going to be any technology transfer between the 2 operations that wasn't there before, or couldn't be applied from the piano industry in general. Bösies are manufactured with the highest level of craftsmanship - something that is far too expensive for Brodmann to replicate, as it would raise the price higher than the marketing position would allow.

For Brodmann to succeed, it must be able to develop the craftsmanship of its super low wage workforce up to the level to produce pianos that are at Tier 2, or possibly Tier 3 (something that Norbert et al seem to think has already happened, and that Larry Fine's estimation merely has too much lag time.)

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#184442 - 11/18/07 08:45 AM Re: Bosendorfer has been sold!
ftp Offline
2000 Post Club Member

Registered: 09/10/05
Posts: 2365
Loc: Philadelphia
 Quote:
Originally posted by Norbert:
Only a manufacturer with great stakes in the industry, including strong future ambitions -including China itself - would understand this.

Huge cache of and incredible access to designs, top people in the industry, 200 years of experience,top notch industry connections, including a network of elite dealers,you name it.

No doubt the new owners will take full advantage of this and build a 'new-market-network' for themselves straight from there.

We should all be in for very interesting times...

Norbert [/b]
So true and right out of the Steinway playbook, which is so maligned at times here.


Growth strategies often require diversification and new markets. The expensive piano market must be relatively saturated and given the product life span, replacement is a huge challenge. Sure you can always try and sell one for each each room or one for each vacation home too- but remember also the housing market is in shambles-which is another challenge for piano sales.

Seems like win-win. Austria keeps a crown jewel, Bosendorfer keeps its identity and tradition and Brodmann gets access to new distribution channels, intellectual property and probably higher prices for its own line (given new cachet). The new owners get personal ego gratification too-which often plays a role in acquisitions.

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#184443 - 11/18/07 09:55 AM Re: Bosendorfer has been sold!
turandot Offline
7000 Post Club Member

Registered: 01/27/07
Posts: 7305
Loc: torrance, CA
from fathertopianist
 Quote:
Growth strategies often require diversification and new markets.
One guess where the largest potential new market is. A second one would probably be Russia with capitalism and mafia-style muscle shaking up the roster of the rich. Seems like Bechstein has a head start there though.

 Quote:
Seems like win-win. Austria keeps a crown jewel,
which apparently is the biggest consideration in Austria, overriding the respective financial resources of the two suitors.

 Quote:
Brodmann gets access to new distribution channels,
to the extent that Boesendorfer dealers are 'persuaded' to carry the Brodmann line. Can't imagine universal acceptance of Brodmann product by Boesendorfer dealers though. Ori would be an example.

 Quote:
Bosendorfer keeps its identity and tradition
The identity for sure but the tradition will be challenged. Every step that new ownership takes in the area of production efficiency and cost savings on materials will be put under the microscope by the 'built to a standard and not a price' element in Europe and North America.

I have a couple of questions for those who understand the actual financial proceedings here.

1) Is Yamaha dead in the water? Are they precluded from coming back with a sweetened offer?

2) If Yamaha were to prevail in an acquisition of this type, would it then need to be approved by their shareholders?
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