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#2112724 - 07/04/13 10:31 AM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Hakki Online   content
2000 Post Club Member

Registered: 05/26/01
Posts: 2445
Originally Posted By: Steve Cohen
It is rather amazing that people with no depth of knowledge in the piano industry would consider their conjecture in these matters as fact.


Don't overestimate yourself.

More or less other people here can guess what will happen with such takeovers.
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#2112732 - 07/04/13 10:40 AM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Numerian Offline
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Registered: 11/04/05
Posts: 1075
Kohlberg is not buying Steinway for $438 million. They are valuing Steinway at $438 million, if everyone tenders their shares at $35/share. How much of its own and its investors money Kohlberg is putting into Steinway isn't clear, but in deals of this nature, it could be $100 million or less. The rest of the $438 million used to purchase the open market shares is being financed by debt, and the debt isn't being taken on by the investors. The debt is taken on by Steinway, and collateralized with every asset the firm has. Nor will the interest rate be cheap, because now Steinway will be valued as a junk debt company by the banks doing the financing.

Without debt these deals don't work for private equity investors. These investors are seeking returns beyond what they can get in bonds or most stocks. When Steinway is cleaned up and fluffed up for its next buyer(s), the private equity investors consider a 20% p.a. return on their investment to be respectable. Most often, the company being bought and sold, when all is said and done, is left with the debt, and there are well known instances where the company lasts only a few years longer before collapsing under the burden of the debt. Kohlberg, fortunately, is not as rapacious as some private equity firms. They tend to keep debt levels minimal, they like to keep existing management involved, and they aren't the sort of firm to declare a fat dividend for themselves in the first six months of ownership (and that dividend can only come from the proceeds of further debt, since these companies are not that profitable so quickly).

A lot depends therefore on how much Kohlberg is putting in of its own money vs. how much debt it is loading on to Steinway's financial burdens. It also matters greatly what sort of return on investment Kohlberg is aiming for. The days of 20% annual returns on private equity deals seem increasingly part of the go-go 90s and 00s, never to return in our lifetime. A more suitable return is 10% or under, and if an investor wants real safety in something like Treasury securities, it is 3% or under.

One other strange thing about this deal is, why now? If Steinway is so attractive as a private equity buyout, it would have been vastly more attractive three years ago when the stock was 70% cheaper. It's very easy to see why Steinway management climbed aboard this deal so fast. After watching their stock recover 70% in the market, for someone to come along and pay a 15% premium on top of that is almost too good to be true.

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#2112756 - 07/04/13 11:36 AM Re: Steinway Bought Out and Going Private [Re: Numerian]
Withindale Offline
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Registered: 02/09/11
Posts: 1936
Loc: Suffolk, England
Originally Posted By: Numerian
Kohlberg is not buying Steinway for $438 million. They are valuing Steinway at $438 million, if everyone tenders their shares at $35/share.

To clarify, $438 million would be paid out to acquire all the shares if the deal goes through?
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Schiedmayer & Soehne, 1925 Model 14, 55" upright
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#2112772 - 07/04/13 12:03 PM Re: Steinway Bought Out and Going Private [Re: laguna_greg]
Del Offline
5000 Post Club Member

Registered: 09/04/03
Posts: 5224
Loc: Olympia, Washington
Originally Posted By: laguna_greg
...This is conceivably worse than when CBS took over. I'm quite shocked the rest of you don't see it regardless of what you read in the papers.

And I am shocked to see that there are some people who view the CBS buyout as such a negative thing. Without that buyout it is a near certainty that there would no longer be a Steinway company. Under private ownership both the factory and the product had been allowed to deteriorate almost to the point of no return when CBS came along and started pouring money into the place. To be sure, management could have been more stable and, perhaps, more enlightened during those years but CBS did salvage the company from oblivion and at least started it on the path back from the abyss.

ddf
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#2112778 - 07/04/13 12:12 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
BDB Online   content
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It sounds as if there have been incremental improvements to the corporate structure and the business ever since the family gave up control, which sounds logical. It may have been too much for one owner to do all at once, but it seems it is a continuing process.
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#2112814 - 07/04/13 01:03 PM Re: Steinway Bought Out and Going Private [Re: laguna_greg]
ClsscLib Offline

Platinum Supporter until Jan 02 2013


Registered: 03/14/08
Posts: 1740
Loc: Northern VA, U.S.
Originally Posted By: laguna_greg
Hi Classic,

I'm with you on that score. The SEC will let the market decide. Eeeewwww, how nasty....the Market is never kind to Art....

...thank you for proving my point for me again, especially about the bottom line...



Alas, I cannot claim credit for such an achievement. It may be that the market is not kind to art, but Mr Kohlberg himself and his former partner Mr Kravis and others in their business have voluntarily done a great deal for art in NY and elsewhere over the years. Just sayin'.

As to piano manufacture, it is precisely the market that has given us the present array of choices of pianos at all levels. Are the choices all that unsatisfactory?

If you want a really inexpensive piano of a certain type and size, you can buy a Young Chang or the like.

If you want a somewhat more refined piano at a very competitive price, you can step up to some of the more established Chinese brands.

Then you have Kawai and Yamaha.

Or Mason or Estonia or August Forster or Charles Walter or Schimmel.

Steinway lovers can get Steinways out of either NY or Hamburg (and whatever happens to the company post-acquisition, there will still be plenty of pre-2014 Steinways on the market for generations to come).

And the market is supplying no scarcity of top-tier pianos, either. None of the other makers has the Steinway marketing machine, but a pianist who can't find a satisfactory instrument among the Bluthners, Sauters, Shigerus, Grotrians, Bosendorfers, Faziolis, Steingraebers, and others in that tier just isn't trying very hard.

It's certainly possible that the buyers in the Kohlberg deal may have some strategy for making money off the Steinway name that entails degradation of piano output. To someone who knows more about business than music, it's hard to see that happening.

The Steinway mark is the crown jewel in the Steinway empire. It would be economically irrational to devalue that mark. The mark is inextricably linked to the perceived quality of Steinway pianos. Ruin the quality, and you ruin the value of the mark, and with it the key value element in the deal. Believe me, Kohlberg is not buying Steinway so that it can sell spools of piano wire on E-Bay.

I agree that the Kohlberg folks want to profit from this acquisition. I cannot see any way they would have a plan to do so that would involve the production of pianos below the current Steinway standard.

But if they do, the acquisition will fail; there will still be many, many other great piano choices (thanks to the market); and someone else will step in to acquire the Steinway piano line at a bargain price and capitalize on that maker's name and history. In fact, I speculate that Steve Cohen's secret strategy may be precisely that. smile



Edited by ClsscLib (07/04/13 01:31 PM)
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#2112824 - 07/04/13 01:28 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Norbert Offline
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Loc: Surrey, B.C.
Quote:
When Steinway is cleaned up and fluffed up for its next buyer(s), the private equity investors consider a 20% p.a. return on their investment to be respectable.


Thinking therein lies the rationale for the whole thing.

IMHO "next buyer" is the one to watch out for.

Guarantee several ones out there are watching already..

Norbert


Edited by Norbert (07/04/13 01:33 PM)
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#2112831 - 07/04/13 01:36 PM Re: Steinway Bought Out and Going Private [Re: Ed Foote]
Jonathan Baker Offline
Full Member

Registered: 06/09/09
Posts: 281
Loc: New York City!
Originally Posted By: Ed Foote
The only way to glory is if the new owners decided to invest more money in improving the skills of the people that build these pianos, and spending the time required for them to operate at the 100% level. It would mean scrapping more plates, rims, wood, etc, to keep the quality as high as it was in the 1920's. These pianos are handmade, and their quality reflects, in a manner becoming increasingly rare, the direct manual skills of the assemblers. A happier bellyman is going to do a better job notching that bridge.

The amount of time given the workers, and their attitude towards their work, shows up in these pianos. If the new owners want to keep the reputation, they will have to invest after the purchase. If the purchase was all the investment the new owners are willing to make, we will see the name watered down and the marque begin its drift backwards through history.


Hello Ed,

I am not a mind-reader so I have no idea what the new owners actually think they are up to, but I am curious about the business end of pricing. For instance, if someone is able to put out $85,000 for a Steinway B (more or less) are they then willing to put up $95,000 or $110,000? What I am referring to is a certain income level. Someone whose annual income is $60,000 will naturally be constricted in their choices, unlike someone who makes ten times that amount. So what is the financial profile of the average consumer of a new Steinway? Perhaps only Steinway knows (if they have been doing their market research).

And I bring that up only to circle around to your point about improving Steinway to its former status. The extra cost this may incur would be forwarded to the consumer, but I would think that someone who can afford a Steinway B or D off the showroom floor is not doing so to save pennies because a Bosendorfer is over their budget.

I had a student who, without consulting me, walked into Steinway during his lunch hour and bought a glossy white John Lennon Special Edition piano for over $100,000. I almost fainted when he told me. LOL. But some people have that spending power and the difference of, say, $20,000, means little or nothing to them.

I had several other students who bought new Steinways not because they really new what they were getting in terms of tone and quality (they were not advanced students) but because of the 'safety' of the Steinway label. Rather like buying a Bentley, one presumes it is well made.

As for the pricing of uprights, well, that is a completely different matter. And as I indicated in a previous post, I think Steinway needs to get a reality-check on the competition if they want to compete effectively.
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#2112839 - 07/04/13 02:00 PM Re: Steinway Bought Out and Going Private [Re: Del]
laguna_greg Offline
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Registered: 04/02/13
Posts: 1337
Loc: guess where in CA and WA
Originally Posted By: Del

And I am shocked to see that there are some people who view the CBS buyout as such a negative thing. Without that buyout it is a near certainty that there would no longer be a Steinway company.

ddf


Hi Del,

You are are absolutely right about that. I don't mean to criticize CBS for their business acumen, or the major role they played in resurrecting the brand. Because they did play such a role.

But you can't pretend, and I mean this with all due respect to your experience and deep understanding in this area, that there wasn't a noticeable falling off in quality of the product from almost the end of WWII to the end of the 1980s. That's a long time to make and sell not-so-great pianos at top prices. Since it was bought back, the output has been uneven and not always comparable with 1- their best products during their best years, or 2- the best products of contemporary top-tier makers.
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1919 Mason & Hamlin AA
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#2112840 - 07/04/13 02:00 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Numerian Offline
1000 Post Club Member

Registered: 11/04/05
Posts: 1075
Can't disagree with anything ClsscLib said. The new owners are going to have to find the right balance between making operations more efficient, and not damaging the brand. My only concern is that given the short term nature of these deals, they may not notice any significant damage until well after they have sold their investment and reaped their profits.

On the question of the luxury market, a lot of high end piano manufacturers noticed a significant fall-off in business when the recession hit in 2008. This was predictable because many people were buying luxury goods using home equity lines of credit as a means of financing the purchase. It was easy, and it was deceptive, because banks marketed the loans as "taking out your hard earned cash from your house". Once the spigot dried up, all elements of the housing market, including pianos, were hurt. This was a US phenomenon, but the housing bubble reached many other countries, including China. A lot of dealers said at least 30% of their business was lost when the bubble burst.

That leaves just the traditional buyers: the occasional wealthy person, institutions like churches, and music lovers. This last group does not consist of wealthy people. Music lovers will make real financial sacrifices and go into debt purposely to get the piano they love. I'm sure Steinway, who make 4000 pianos a year at different price levels, is well aware of this group of stable customers. They just have to make the Kohlberg people aware of them as well.

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#2112845 - 07/04/13 02:13 PM Re: Steinway Bought Out and Going Private [Re: ClsscLib]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1337
Loc: guess where in CA and WA
Hi Class,

(can I write it that way?)

"As to piano manufacture, it is precisely the market that has given us the present array of choices of pianos at all levels. Are the choices all that unsatisfactory?"

Not at all! As a matter of fact, the consumer has more choices for pianos at every range of quality and performance then they've ever had. It is easier to buy a well-made, quality piano now than it has been since before WWII.

"The Steinway mark is the crown jewel in the Steinway empire. It would be economically irrational to devalue that mark. The mark is inextricably linked to the perceived quality of Steinway pianos. Ruin the quality, and you ruin the value of the mark, and with it the key value element in the deal. Believe me, Kohlberg is not buying Steinway so that it can sell spools of piano wire on E-Bay."

You are absolutely right, and I agree 100% with that. But having said that, we must both concede that everybody has different ideas about how to achieve such a goal, sort of like what Numerian said. An investment banker or accountant will not see the issue the same way a piano technician does. As I just posted a second ago, a lack of coherent direction and some rather ham-handed ideas gave us 30 years of not-so-good quality S&Ss. Fortunately for them, the S&S marketing machine overcame whatever perceptions the public might have developed to 1- maintain prices and sales during this period, and 2- successfully promote the brand image and mystique. It's rather ominous to me how the right marketing campaign can often convince the public to buy anything of poor quality, not just pianos.

Are we going to see this happen again? That's my concern.



Edited by laguna_greg (07/04/13 02:17 PM)
Edit Reason: thought of something
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1919 Mason & Hamlin AA
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http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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#2112875 - 07/04/13 03:20 PM Re: Steinway Bought Out and Going Private [Re: laguna_greg]
ClsscLib Offline

Platinum Supporter until Jan 02 2013


Registered: 03/14/08
Posts: 1740
Loc: Northern VA, U.S.
Originally Posted By: laguna_greg
Hi Class,

(can I write it that way?)...



I've certainly been called by worse names than that! Even "evil genius" once. They got that half right.
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#2112917 - 07/04/13 05:00 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
patH Offline
500 Post Club Member

Registered: 03/09/13
Posts: 558
Loc: Germany
After reading most comments on this thread I can say: I don't really have an opinion about the sale.
I know that Bösendorfer has been bought by Yamaha, and Seiler by Samick. It didn't hurt the top tier companies; but then, Yamaha and Samick are music instrument manufacturers. Kohlberg isn't.

My guess for the best-case scenario for Steinway would be: Kohlberg changes things in management, and somehow manages to restructure Steinway so that they still make good pianos, but with less cost; and the value of the company goes up. Then, after a few years, Kohlberg sells Steinway to a huge music instruments manufacturer, and everybody is happy.
I can even think of two logical choices for the next-to-next owner of Steinway: Kawai or Pearl River. No need to leave Boston or Essex to come to New York or Hamburg.
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#2112922 - 07/04/13 05:25 PM Re: Steinway Bought Out and Going Private [Re: laguna_greg]
Steve Cohen Offline
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Loc: Maryland/DC/No. VA
Originally Posted By: laguna_greg
It's rather ominous to me how the right marketing campaign can often convince the public to buy anything of poor quality, not just pianos.

Are we going to see this happen again? That's my concern.



Could they build Boston's competitively in a new plant in the U.S. and market it successfully? Could that be a stepping stone to moving Steinway's factory and selling the Astoria property? Would that satisfy a private equity firm's goals, or a piano industry investor's?


[The questions above are based solely on conjecture.]
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#2112934 - 07/04/13 06:05 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Minnesota Marty Offline

Platinum Supporter until October 5 2014


Registered: 05/15/12
Posts: 7239
Loc: Rochester MN
Originally Posted By: laguna_greg
It's rather ominous to me how the right marketing campaign can often convince the public to buy anything of poor quality, not just pianos.

Do you believe this applies to Steinway?
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#2112952 - 07/04/13 07:02 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Ed McMorrow, RPT Offline
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Registered: 12/09/12
Posts: 1957
Loc: Seattle, WA USA
It would be interesting to know what role the present owner of 40% 0f the Steinway stock, (I believe his name is Mr. Lee, the owner of Samick pianos) is slated to play with Steinway or Kohlberg.
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#2112973 - 07/04/13 07:59 PM Re: Steinway Bought Out and Going Private [Re: Ed McMorrow, RPT]
Steve Cohen Offline
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Registered: 05/26/01
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Originally Posted By: Ed McMorrow, RPT
It would be interesting to know what role the present owner of 40% 0f the Steinway stock, (I believe his name is Mr. Lee, the owner of Samick pianos) is slated to play with Steinway or Kohlberg.


At least someone is asking a pertinent question.

It leads to another question: Could they realistically do all of this without Chairman Lee's support?
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Consultant & Contributing Editor - Acoustic & Digital Piano Buyer

Jasons Music
Maryland/DC/No. VA
Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2112974 - 07/04/13 08:02 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
ClsscLib Offline

Platinum Supporter until Jan 02 2013


Registered: 03/14/08
Posts: 1740
Loc: Northern VA, U.S.
Originally Posted By: Steve Cohen
Originally Posted By: Ed McMorrow, RPT
It would be interesting to know what role the present owner of 40% 0f the Steinway stock, (I believe his name is Mr. Lee, the owner of Samick pianos) is slated to play with Steinway or Kohlberg.


At least someone is asking a pertinent question.

It leads to another question: Could they realistically do all of this without Chairman Lee's support?


If he really owns 40% of the stock, it would be almost impossible without his support -- and almost inconceivable that the Board would have recommended the deal.


Edited by ClsscLib (07/04/13 08:03 PM)
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#2112983 - 07/04/13 08:23 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Norbert Offline
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Registered: 07/03/01
Posts: 14135
Loc: Surrey, B.C.
Quote:
Then, after a few years, Kohlberg sells Steinway to a huge music instruments manufacturer, and everybody is happy.
I can even think of two logical choices for the next-to-next owner of Steinway: Kawai or Pearl River.


Well, only one of them will have the money to do so...

[not a particular pleasant thought on July 4th...]

Norbert shocked
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#2112987 - 07/04/13 08:41 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
ClsscLib Offline

Platinum Supporter until Jan 02 2013


Registered: 03/14/08
Posts: 1740
Loc: Northern VA, U.S.
Apologies if this has already been posted:

http://www.marketwatch.com/story/the-mus...mod=marketwatch
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#2112988 - 07/04/13 08:44 PM Re: Steinway Bought Out and Going Private [Re: ClsscLib]
Steve Cohen Offline
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Registered: 05/26/01
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Loc: Maryland/DC/No. VA
Originally Posted By: ClsscLib
Originally Posted By: Steve Cohen
Originally Posted By: Ed McMorrow, RPT
It would be interesting to know what role the present owner of 40% 0f the Steinway stock, (I believe his name is Mr. Lee, the owner of Samick pianos) is slated to play with Steinway or Kohlberg.


At least someone is asking a pertinent question.

It leads to another question: Could they realistically do all of this without Chairman Lee's support?


If he really owns 40% of the stock, it would be almost impossible without his support -- and almost inconceivable that the Board would have recommended the deal.


Exactly!
_________________________
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Since 1937.

www.jasonsmusic.com
My postings, unless stated otherwise, are my personal opinions, not those of my clients.

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#2112989 - 07/04/13 08:47 PM Re: Steinway Bought Out and Going Private [Re: ClsscLib]
pianoloverus Online   content
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Registered: 05/29/01
Posts: 19262
Loc: New York City
Originally Posted By: ClsscLib
Apologies if this has already been posted:

http://www.marketwatch.com/story/the-mus...mod=marketwatch
That article is filled with so many factual errors it's almost beyond belief.

Just a few of them:

Steinways appreciate at 4% a year.

The company has raised its prices every year since its 1853 founding.

A used Steinway goes for about 75% less than a new one.

A properly maintained Model D concert grand piano that sold for $13,500 in 1975 is worth $137,400 today.

A smaller Model S — just over five feet long and can fit in a living room — sold for $5,540 in 1975 and is similarly worth 10 times that amount today.


Edited by pianoloverus (07/04/13 08:53 PM)

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#2113000 - 07/04/13 09:23 PM Re: Steinway Bought Out and Going Private [Re: pianoloverus]
carey Offline
6000 Post Club Member

Registered: 05/13/05
Posts: 6271
Loc: Phoenix, Arizona
Originally Posted By: pianoloverus
Originally Posted By: ClsscLib
Apologies if this has already been posted:

http://www.marketwatch.com/story/the-mus...mod=marketwatch
That article is filled with so many factual errors it's almost beyond belief.

Just a few of them:

Steinways appreciate at 4% a year.

The company has raised its prices every year since its 1853 founding.

A used Steinway goes for about 75% less than a new one.

A properly maintained Model D concert grand piano that sold for $13,500 in 1975 is worth $137,400 today.

A smaller Model S — just over five feet long and can fit in a living room — sold for $5,540 in 1975 and is similarly worth 10 times that amount today.


And apparently the factual errors can be attributed to Anthony Gilroy, Steinway's Director of Marketing and Communication. crazy
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#2113006 - 07/04/13 09:43 PM Re: Steinway Bought Out and Going Private [Re: ClsscLib]
jazzyprof Offline
2000 Post Club Member

Registered: 11/30/04
Posts: 2622
Loc: Ann Arbor, MI
Originally Posted By: ClsscLib
Apologies if this has already been posted:

http://www.marketwatch.com/story/the-mus...mod=marketwatch


"A used Steinway goes for about 75% less than a brand-new one,"

75% less than a brand new one means that if a brand new one costs $100,000, the used Steinway costs $25,000. What a bargain! grin
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#2113008 - 07/04/13 09:46 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
R_B Offline
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Registered: 09/03/09
Posts: 501
Originally Posted By: Steve Cohen
It is rather amazing that people with no depth of knowledge in the piano industry would consider their conjecture in these matters as fact.


The advantage of being far enough back from the woods to see the trees - or somesuch saying.
(-:
Understanding the nitty gritty details CAN cloud one's vision.

As a BUSINESS they don't have to understand the finer details of piano (or whatever other product) construction.
Materials + value add + profit = price.

Value add includes mystique, reputation, etc. and of course Mahh_ketting.

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#2113016 - 07/04/13 10:23 PM Re: Steinway Bought Out and Going Private [Re: R_B]
ClsscLib Offline

Platinum Supporter until Jan 02 2013


Registered: 03/14/08
Posts: 1740
Loc: Northern VA, U.S.
Originally Posted By: R_B


...Materials + value add + profit = price....



Not really. Price equals what the buyer is willing to pay to a seller willing to sell.

Period.


Edited by ClsscLib (07/04/13 10:25 PM)
_________________________


"People may say I can't sing, but no one can ever say I didn't sing."

-- Florence Foster Jenkins

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#2113021 - 07/04/13 10:42 PM Re: Steinway Bought Out and Going Private [Re: laguna_greg]
Del Offline
5000 Post Club Member

Registered: 09/04/03
Posts: 5224
Loc: Olympia, Washington
Originally Posted By: laguna_greg
Originally Posted By: Del

And I am shocked to see that there are some people who view the CBS buyout as such a negative thing. Without that buyout it is a near certainty that there would no longer be a Steinway company.

ddf


Hi Del,

You are are absolutely right about that. I don't mean to criticize CBS for their business acumen, or the major role they played in resurrecting the brand. Because they did play such a role.

But you can't pretend, and I mean this with all due respect to your experience and deep understanding in this area, that there wasn't a noticeable falling off in quality of the product from almost the end of WWII to the end of the 1980s. That's a long time to make and sell not-so-great pianos at top prices. Since it was bought back, the output has been uneven and not always comparable with 1- their best products during their best years, or 2- the best products of contemporary top-tier makers.

I agree both that there was a noticeable decline in build quality and performance during those years. I also agree that this was a long time to be selling pianos of rather poor build quality and performance at top prices. But the downward spiral started and accelerated under private, not public, ownership and management. The reversal of that decline didn’t take place immediately after the CBS buyout but it did slow down. I was in the factory not long after the buyout and observed some of the things CBS money was beginning to accomplish in the factory and it was quite a lot. Yes, quality was still declining but things were beginning to stabilize and there was hope that the light at the end of the tunnel might not be an oncoming train.

Piano building is a complex task involving a wide variety of knowledge and skills and infrastructure. I have never worked for Steinway but since those years I have worked for several other piano makers and I have observed that once a serious decline starts it’s hard to stop it, let alone turn it around. You don’t just call someone in and say, “Fix it.” It takes time just to fully assess the damage done by decades of neglect. And then it takes more time to develop and implement the actual process of fixing everything. Aside from the obvious challenges of getting a new management team in place and functioning smoothly, rebuilding a complete factory is not easy. Replacing worn out and obsolete machinery—at least some of which will be task-specific and has to be designed and built accordingly—can take years even with large budgets. Training new workers and instilling a new work ethic also does not occur overnight.

It is not all that unexpected that it took a decade for discernible results to become apparent in the finished product. The turnaround started with CBS but the results didn’t become obvious until sometime later. It’s been rather like the tanker at sea; the captain may order the ship to a full emergency stop but it’s going to take five kilometers for that to happen.

Please note that I don’t have investments in either CBS or Steinway (at least none that I’m aware of) but I well remember what I saw in the factory back then and much of it wasn’t very pretty. And today it seems neither fair nor accurate to blame CBS for damage done to the factory and the product through the mismanagement of others. I remain convinced that without the CBS buyout, CBS money and the changes CBS set in motion there would be no Steinway company today.

ddf


Edited by Del (07/04/13 10:46 PM)
_________________________
Delwin D Fandrich
Piano Research, Design & Manufacturing Consultant
ddfandrich@gmail.com
(To contact me privately please use this e-mail address.)

Stupidity is a rare condition, ignorance is a common choice. --Anon

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#2113023 - 07/04/13 10:50 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Ed McMorrow, RPT Offline
1000 Post Club Member

Registered: 12/09/12
Posts: 1957
Loc: Seattle, WA USA
Apparently Anthony Gilroy's marketing expertise does not include current prices for used Steinway's. I just sold a like new rebuilt 1926 walnut M for $33K. Customer could easily have purchased new-but they know a good piano when they play/hear it-and they don't want to waste money.
_________________________
In a seemingly infinite universe-infinite human creativity is-seemingly possible

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#2113024 - 07/04/13 11:11 PM Re: Steinway Bought Out and Going Private [Re: Steve Cohen]
Norbert Offline
Yikes! 10000 Post Club Member

Registered: 07/03/01
Posts: 14135
Loc: Surrey, B.C.
Well, one thing for sure:

We're living in interesting times!

Norbert smile


Edited by Norbert (07/04/13 11:32 PM)
_________________________
www.heritagepianos.com
Greater Vancouver B.C. piano dealers for : C.Sauter, Estonia, Brodmann, Ritmuller
604-951-8642

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#2113050 - 07/05/13 12:43 AM Re: Steinway Bought Out and Going Private [Re: ClsscLib]
laguna_greg Offline
1000 Post Club Member

Registered: 04/02/13
Posts: 1337
Loc: guess where in CA and WA
Originally Posted By: ClsscLib
Originally Posted By: laguna_greg
Hi Class,

(can I write it that way?)...



I've certainly been called by worse names than that! Even "evil genius" once. They got that half right.


I long to be called an evil genius...
_________________________
Laguna Greg

1919 Mason & Hamlin AA
1931 Bechstein C - now sold
http://www.triangleassociates-us.com/about_us (my day job)
http://en.wikipedia.org/wiki/Dorothy_Taubman (a recent article I wrote about one of my teachers)

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