Piano World Home Page Forums Our Most Popular Forums Piano Forum Steinway Bought Out and Going Private

You know, it just occurred to me:

If the New Steinway brand, post-acquistion, continues to put out mediocre instruments or worse, all we're going to do in our comments here is kvetch and complain about how dismal the New Steinways are, sort of how we've been complaining, only more so, much much more.

Something for the "industry" to consider...

...do you think they actually read these posts...

...oh my...

...if that happens, are you going to sue Piano World like those other industry reprobates? Case law stands against the approach...

Look, we don't even know if the sale will go though. There is a wait period during which other bids will be considered. Perhaps Samick will bid in? Let's all calm down a bit, and see what happens.

Hi Bob,

Since the press release has already gone out on several media organs, it's a safe bet that the deal will go through. BTW, I don' think Samick can offer the same deal as Kohlberg. Since the S&S is publicly traded, the SEC will have a lot to say about how the deal is settled, which may preclude choosing one buyer over another based on industry standing or philosophical intent.

Steinway can accept other offers for 45 days, I think the time period was.

Oh, of course they can, as they are publicly traded and therefore the sale is governed by the SEC. But that's just like the last time I submitted a government bid. Before I got to the first bid/procurement meeting, and even though my company was obviously the best service provider among those who were bidding, the department had already picked their preferred vendor, before RFQs were even issued. There was nothing I could say or do.

Kohlberg will certainly be the successful bidder.

He also could be under a non-disclosure agreement if he's a paid consultant. His statements are suspect only to the extent to which you're suspicious of them. Just sayin'.

I was in the Steinway showroom on 57th Street last month with a student. We tried out every grand on the main floor, focusing primarily on the B and D models.

There was only one rebuilt instrument on the floor on that day - a Steinway C, I think around 1890 - that triumphed over every grand in the showroom, and triumphed by far. There was simply no comparison. I have encountered this repeatedly with excellent rebuilds of large Steinway grands of the pre-war era. That bronze tone is unique and magnificent, fully justifying the legend of Steinway.

I would be delighted if some billionaire bought up Steinway for the sole purpose of restoring Steinway to its former glory. But I have not gotten any indication that this is what is happening, although I would be happy to be proved wrong.

BTW, the uprights carry rather aristocratic price tags, and I would not put forth that kind of money when I know I could get better tone for less dollars elsewhere.
I don't like to criticize like that, but I have had to guide students to other makers because of this (and I do not take commissions on sales).

So we have, on the one hand, a consultant on repetitive stress injury; and on the other, a widely recognized authority on piano industry operations, practices, and strategic planning.

If I have a question about repetitive stress, I know exactly who I'll be calling.

In the meantime, as someone who has practiced a lot before the SEC, let me tell you that the SEC could care less about merits of an acquisition bid or the strategic visions of competing bidders. That's not what the SEC does.

Rather, their interest is in making sure that the required disclosure documents satisfy the rather technical disclosure requirements of the federal securities laws. If they do, then the SEC won't give a fig about what will happen to the acquired company under one scenario or another. Under the securities laws, that's for the market to decide.

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...

BTW, if you ever have a hand or wrist problem, call me first. I'll give you the first hour for free (and I don't give that to just everybody, the law usually prevents it...). I won't bother to lie to you...

BTW, I would LOVE to be proved wrong about this. When will we read something from the industry experts that will convincingly contradict what I've been posting?

...(waiting)....(waiting)...

Hi JM,

Which means that, if he has indeed signed a non-disclosure agreement, every public pronouncement he makes must satisfy and protect his contracted and de facto or implied fiduciary interests to all the signatories, not to ours...which makes him a shill for industry, as I said earlier...

...all the more reason to disbelieve...

...just sayin'...thanks for proving my point...

Hi Jonathan,

I know exactly what you mean. Such a pity that upper management ignores your post. Perhaps that will change after the sale goes through...

"I don't know who you are. I don't know what you want. If you're looking for ransom, I can tell you I don't have money but what I do have are a very particular set of skills. Skills I have acquired over a very long career. Skills that make me a nightmare for people like you."

HI Stephen,

LOLOLOLOLOLOL

I am sure there is a soap opera xyz around it, but profit margins around 4% and your capital doing just as well or better in an index fund without the hassle, you look for an exit.

It was a similar scenario for the Steinway family shareholders' sell to CBS.

I am glad the new owners have a dream, but it isn't like the previous owners didn't have this vision and execution strategy either. I saw Steinway ads in Asia during my last travels there, Steinway is already leveraging their name into other products. Sure, the new guys think they are going to do it mo fasta, mo betta. But, with more debt. I don't see the net good, but time will tell.

If that's truly Steinway New York's business model, then they are even bigger fools than I suspected. You place the reputation of your company and product in the hands of dealers who could care less? Ask Rich Galassini or Ori Bukai if they would EVER consider placing one of the incredible instruments on their sales floor in LESS than optimally prepped condition, in the hopes of selling it to some "furniture" customer.

The "What" ? Yes.
The "How" ? is TBD.

The "What" is that as a company Steinway is hurting and probably can't survive much longer in its present condition (business model, way of working, current and anticipated market, etc.) it therefore needs some sort of a "turnaround".

The "How" COULD (may or may not) mean extending "down market", asset stripping, whatever all else.
Kinda depends on what the new owners' motivations are and we are GUESSING on those.
Not saying our guesses are right or wrong, not saying that the new owners have fully formed their plans yet, just saying that WE are guessing WRT the "How".

OTOH maybe they are going the way of Kodak;
I dunno bout this Polaroid stuff and digital cameras and such, but we have been in wet photography since the beginning and the Brownie brought home snapshots to EVERYONE.

It is rather amazing that people with no depth of knowledge in the piano industry would consider their conjecture in these matters as fact.

Greetings,
There are many avenues down which Steinway and Sons may be taken. For the musician, the desired route is the one that leaves us with dependably consistent, even, responsive, instruments. There is only one way for that to happen, and it takes faith to make the investment.

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.

Regards,

Quite right, guesswork is so much fun.

Kohlberg appear to have a well established business model and you can see how they apply it by looking at their investments, all emblazoned across their website.

The press release clearly states their intentions - but nobody believes a word of that, do they?

When you spend $400 million on a brand like Steinway and your aim is to maximize what it realizes in a few years time, what would you do, and why should Kohlberg do anything else - unless they are incredibly smart or amazingly stupid?

Of course they may strip out under performing assets, flog off the instruments, introduce better business practices, but won't the price new owners are prepared to pay for Steinway ultimately depend the quality of the pianos?