Steinway Hall in NY - Sold?

Posted by: Plowboy

Steinway Hall in NY - Sold? - 11/14/12 05:49 PM

According to the earnings report conference call last Tuesday, Steinway Hall in New York is in the process of being sold.

The deal is not final, and they wouldn't say who the buyer is, but the price for the building is $56 million. According to Wikipedia, that would be a $6 million loss over what they paid for it in 1999. In discussing the deal, they never referred to Steinway Hall but to the 57th Street property.

Hard to tell what's going on in that company. No new news on selling the band division to the Messina group. They've shelled out at least a couple of million bucks to consultants exploring their "strategic alternatives". Seems like throwing money down the drain.

Sales are down a bit in the U.S., flat in Europe and booming in China and Japan. In the past there was mention that Japan was becoming too expensive and it was hurting Boston sales. No mention of that in the last call.
Posted by: dsch

Re: Steinway Hall - 11/14/12 08:33 PM

In the USA they've priced themselves out of the market.
Posted by: PianoWorksATL

Re: Steinway Hall - 11/14/12 09:28 PM

I haven't seen that reported elsewhere yet, but I would not be surprised. I'm glad I visited last month when I did.
Posted by: fingers

Re: Steinway Hall - 11/14/12 10:00 PM

According to Bloomberg News- 195m

fingers
Posted by: Plowboy

Re: Steinway Hall - 11/14/12 10:39 PM

Originally Posted By: fingers
According to Bloomberg News- 195m

fingers


The 195 covers the land and building. Steinway Musical Instruments only owns the building.
Posted by: Mark VC

Re: Steinway Hall - 11/14/12 11:17 PM

Played a bunch of new B's today at Fields Piano in Orange County, which has been selling pianos for many years in the LA area and is in the process of converting to a full-fledged Steinway showroom, which will mean Steinway/Boston/Essex only. Anyway played these five new B's, and they were each quite different from the other - as different in sound as different makes of piano are from each other - wondering what others consider the "Steinway sound" to be, if there is such a thing. Also played a 1905 'D' - wonderful old buffalo, full of character.
Posted by: fingers

Re: Steinway Hall - 11/14/12 11:34 PM

Originally Posted By: Plowboy
Originally Posted By: fingers
According to Bloomberg News- 195m

fingers


The 195 covers the land and building. Steinway Musical Instruments only owns the building.


- Land lease? I've never been too swift in matters concerning real estate. smile

fingers
Posted by: Bob

Re: Steinway Hall - 11/15/12 09:38 AM

I guess the question that comes to mind is that buildings proximity to Carnegie Hall is very convenient for artists and transport of pianos from the basement to Carnegie. I wonder if Steinway will lease space to retain that location?
Posted by: LJC

Re: Steinway Hall - 11/15/12 05:42 PM

To Mark - The Steinway sound - lots of overtones
Posted by: Mark...

Re: Steinway Hall - 11/15/12 08:26 PM

Link
Posted by: Piano World

Re: Steinway Hall - 11/16/12 11:49 AM

And this in MMR ( Musical Merchandise Review )

Steinway to Sell Landmark Hall
It’s being reported that Waltham-Mass. based Steinway Musical Instruments, Inc. has reached an agreement to sell its building near Manhattan’s Carnegie Hall at 109 W 57th Street for $195 million.

Steinway anticipates proceeds of $56.3 million, of which $20 million will be held in escrow until the company vacates the space it occupies, according to a regulatory filing (LVB) signed by CEO Michael Sweeney. The filing doesn’t specify a buyer or say precisely when or whether Steinway would leave the building. The transaction is expected to be completed before the end of the calendar year, however.

Steinway Hall has been the flagship store of the company’s Steinway & Sons unit, according to its website. The location is described as a Beaux Arts landmark, with a 19th-century Viennese crystal chandelier and ceiling decorated with allegorical scenes of lions, elephants, goddesses and nymphs, painted by artist Paul Arndt.
Posted by: pianoloverus

Re: Steinway Hall - 11/16/12 11:59 AM

So does this mean Steinway will no longer have a dealership there or just that the building is being sold and Steinway would rent the space for a dealership there? Or is this undecided/unknown at present? It would be a great shame if Steinway Hall was to close.

Is the 57th dealership the largest Steinway dealership in the world?
Posted by: sophial

Re: Steinway Hall - 11/16/12 05:27 PM

This would be very sad news if Steinway Hall were no more. I enjoyed my visits there so much -- glad I went when I did! (and I was treated very nicely even though I was not there to buy).


Sophia
Posted by: Piano World

Re: Steinway Hall - 11/16/12 05:39 PM

Originally Posted By: sophial
This would be very sad news if Steinway Hall were no more. I enjoyed my visits there so much -- glad I went when I did! (and I was treated very nicely even though I was not there to buy).


Sophia


I agree Sophia,

Kathy and I visited Steinway Hall in September, and we too were treated very well.

http://www.pianoworld.com/forum/ubbthreads.php/topics/1966556/

It's a beautiful building and a tradition for piano lovers to visit while in New York (as is Piano Row on W. 58th)
Posted by: BerndAB

Re: Steinway Hall - 11/16/12 06:11 PM

Originally Posted By: Bob
I guess the question that comes to mind is that buildings proximity to Carnegie Hall is very convenient for artists and transport of pianos from the basement to Carnegie. I wonder if Steinway will lease space to retain that location?


They have a lorry or several, to transport pianos and have the people to handle these matter. They can re establish a dealership anywhere else in Greater New York City or neighbouring cities where it is much cheaper to buy land, build houses or rent them, compared with "Piano Row" W 58th St. in the core of Manhattan near Central Park.

Wasn't there a newly established museum and a giant shop on Long Island, also owned by Steinway & Sons? They can do their business from there.

The business consultants will say: "Concentrate on core business!" & "Cut avoidable costs!"

So a piano scenery landmark might disappear - from Midtown Manhattan, maybe. But will be reestablished at another location. If the Rikers Plant has enough space, they can offer pianos also there.

But maybe Steinway will again rent their formerly owned house? Like they did with Steinway Hall before..?..

If the new owner will not immediately have another purpose for that building, the Steinway business may stay inside on rental basis?

I think I should speed up my plans to go for a visit to the USA.. ;-) ..to see Old Steinway Hall.

...old? First Steinway Hall was established 1866 on 14th Street.

http://en.wikipedia.org/wiki/Steinway_Hall

In this article yet no change is mentioned as intended. Might there be no change? or is it "slow Wikipedia"? ..wondering..
Posted by: RealPlayer

Re: Steinway Hall - 11/16/12 06:33 PM

When I was asked to help a NY concert hall pick out a new S&S D about a year ago, it was not Steinway Hall we were taken to, it was their facility in Queens. So clearly some of the selection process already takes place there.

But there's nothing like the cachet of Steinway Hall with its painted domed ceiling, fine furnishings, hushed atmosphere and discreet desks for the staff. I hope they can stay there, even as a rental.

And surely they're not going to ask world-renowned artists to travel to Queens to make their selections!
Posted by: Norbert

Re: Steinway Hall - 11/16/12 10:07 PM

Could it be that, among perhaps more basic economic reasons their location attracted also many buyers to "piano row" who then did end up not buying from them?

Guarantee the competition ain't very happy with the move.

Steinway for years, had their own, far away location from all others at NAMM show too.

Sadly, a historic New York landmark gone.

Norbert
Posted by: pianoloverus

Re: Steinway Hall - 11/17/12 08:28 AM

Originally Posted By: Norbert
Could it be that, among perhaps more basic economic reasons their location attracted also many buyers to "piano row" who then did end up not buying from them?
Probably not as the Piano Row stores have been there for 10-20 years or more. Before that there were Baldwin and Yamaha dealers within one block of Steinway Hall.
Posted by: ClsscLib

Re: Steinway Hall - 11/17/12 08:36 AM

They may well be leaving the space, but the sale of the property by itself doesn't necessarily mean that will happen.

Companies frequently continue to occupy all or some space in buildings they dispose of in "sale and leaseback" transactions. Depending on applicable tax and accounting issues, such a deal can end up being financially positive both for buyer and seller.
Posted by: Piano World

Re: Steinway Hall - 11/17/12 08:52 AM

Originally Posted By: ClsscLib
They may well be leaving the space, but the sale of the property by itself doesn't necessarily mean that will happen.

Companies frequently continue to occupy all or some space in buildings they dispose of in "sale and leaseback" transactions. Depending on applicable tax and accounting issues, such a deal can end up being financially positive both for buyer and seller.


Good point.
McGraw-Hill (publishing company in NY) did exactly that.
They sold their building, at a profit, and then leased space in it.
Posted by: Steve Cohen

Re: Steinway Hall - 11/17/12 09:15 AM

I thought I read that part of the purchase price was being held until they vacate.

This would argue that they won't be doing a lease-back.
Posted by: Piano World

Re: Steinway Hall - 11/17/12 09:41 AM

Hmmnn Steve,
That does seem to indicate they are leaving the hall.

We have a few Steinway company people among our members (and more watch the forums).

I've emailed one hoping he might consider straightening things out for us, although I'm
sure that will depend on the companies "official" position.

It would be a shame for them to have to leave that beautiful old building, but I know business is business.
Posted by: nylawbiz

Re: Steinway Hall - 11/17/12 10:36 AM

End of an era. Is this the beginning of the dismantling of Steinway & Sons as we know it? I have a hard time imagining that an Asian owner really cares or even understands what the S&S building, no less S&S itself means to Americans, New Yorkers and American pianists. In addition to the iconic brand, S&S also represents our glimmer of hope that America can still manufacturer a world class product, even in New York City.

If in fact Astoria is only putting out 1,500 pianos a year, things are very dire indeed for this great institution. How long can the factory exist? Having taken the tour of the factory earlier this year and seeing the size and complication of the plant is amazing. And probably amazingly expensive to maintain, especially in Queens. I'm afraid the writing is on the wall that future viewers of "Note By Note" will view it as a quaint historical memoir, instead of a documentary on a contemporary subject.

At least we will have all the Steinway pianos out there as testament of what was, even into the 21st century. That's if any pianos remain here in the United States, as opposed to most of them eventually being gobbled up and sent overseas to China and the Pacific Rim. China is already Steinway's biggest customer. With the Chinese population growing and becoming more prosperous, the demand for Steinways in the East will continue, even with the demise of S&S as we know it. So, it may come a day when a Steinway piano in North America may become as rare as hens' teeth.

This will be a boom to the rebuilders, but probably a big blow to the popularity of piano playing, so in the end, no one winds (except maybe Samick).

So sad and there is nothing we can do to stop the eventuality.
Posted by: Plowboy

Re: Steinway Hall - 11/17/12 10:57 AM

Originally Posted By: nylawbiz
End of an era. Is this the beginning of the dismantling of Steinway & Sons as we know it?


Hard to say. Kirkland and Messina are out. I think that might be a good thing. They said they were losing $5 million per year on the building, not sure why.

This deal of selling the band division to Messina and his crew smells, though.

Samick has a huge interest in the company. That might be a good thing, they are piano makers. Haven't they left Seiler in Germany alone since that buy out?

Reading between the lines of some of the last SEC filings, I bet Samick will end up making Bostons.
Posted by: Bob Snyder

Re: Steinway Hall - 11/17/12 11:00 AM

Hello everyone -
There is not too much I can add at this point - other than to say that the announcement as reported by MMR is correct. Please remember that the building was sold once before - but we remained as tenants - and ultimately repurchased the building. The sky didn't fall, and the world did not come to an end. Nor will it this time, should this sale close.

We are certainly committed to the New York market, and will continue to have a major presence there.

As a 31 year Steinway & Sons employee, I can appreciate both sides of this. Steinway Hall is a facility that has been much more than a retail store, that's for sure. Yet if we step back and look at this objectively, it is not unreasonable for a company to look at all the factors involved in such a decision - then make the decision that they believe to ultimately be in the company's best interest. In fact, it would be irresponsible NOT to do so.

Lastly, and in response to the comments above that suggest this decision is indicative that Steinway is on the way out: nothing could be further from the truth. We've been around a long time - and have weathered many storms (including the very recent and literal storm). As far as whether this is the beginning of "the dismantling of Steinway & Sons": absolutely not! Our factory remains very busy, and our company continues to be profitable. the number of retail stores we now own is much higher than was the case 10 years ago. This has to do with one specific (an incredibly well known) retail location. It by no means suggests anything beyond that as to the overall future of Steinway & Sons - other than that our commitment to remain and thrive has not changed. Consider New York just for one last minute: 20 years ago, we had one major location. Today, we have four.

Our commitment to the New York retail market has grown; it has not diminished, nor will it.

I appreciate the fact that so many care about this. Thank you.
Posted by: nylawbiz

Re: Steinway Hall - 11/17/12 11:22 AM

Glad to hear from you Bob, and the positive information and opinion you have shared. You know of my affection for S&S, I only hope for the best for the company.

If production is in fact down to 1,500 units a year, I can not imagine how such a small production can support a huge plant such as Astoria. I understand that rebuilding and parts has to help, but still, . . . How does a factory that size, located on what is now prime real estate in New york City, stay in place? Like so many businesses, S&S's New York real estate holdings may be too value to keep. The temptation to a CFO is too much. Looks like that was the motivation for the 57th Street deal, can an Astoria deal be far behind?
Posted by: Norbert

Re: Steinway Hall in NY - Sold? - 11/17/12 12:29 PM

Quote:
China is already Steinway's biggest customer. With the Chinese population growing and becoming more prosperous, the demand for Steinways in the East will continue,


This is true but to my information these are all Hamburgs.

Please someone correct me if this is wrong.

Norbert
Posted by: nylawbiz

Re: Steinway Hall in NY - Sold? - 11/17/12 01:05 PM

I think you're right Norbert, but that is a result of how historically pianos were marketed by S&S. I believe that they have always supplied the East from Hamburg. Astoria was to cover the Western Hemisphere. So, the population of old Steinways in China are probably 99% Hamburgs. That's what the Chinese know. The NY Steinway is a great instrument, not any less than a Hamburg. We can argue over the differences, but I doubt there is a pianist from anywhere in the world, including China, who wouldn't fall in love with any properly working and tuned Steinway, whether it be form NY or Germany.

China is still a developing country, with a VAST population. There are probably 100's of millions of people who will want to learn how to play a piano ten years from now, who today have no idea what a Steinway is.

FWIW. I predict that 20 years from now, the piano industry will be booming like nothing seen before in history. Most likely, it will all be happening in China and the East.

The Great Carnac has spoken.
Posted by: Piano World

Re: Steinway Hall in NY - Sold? - 11/17/12 01:23 PM

China is # 38 in our list of visitors right now, but they have been gaining.
This is a list of visitors to Piano World over the past year...

1 United States 4,430,626
2 United Kingdom 816,816
3 Canada 621,953
4 Australia 351,508
5 Germany 169,590
6 Netherlands 119,156
7 France 116,205
8 Italy 106,015
9 Philippines 103,269
10 India 97,397
11 Singapore 93,829
12 Malaysia 84,791
13 Spain 77,871
14 Sweden 73,523
15 (not set) 66,469
16 Ireland 64,250
17 Brazil 58,467
18 New Zealand 55,162
19 Belgium 53,134
20 Poland 52,750
21 Indonesia 50,391
22 Finland 47,624
23 Mexico 47,388
24 Greece 42,662
25 South Africa 42,649
26 Denmark 41,668
27 Norway 41,098
28 Switzerland 40,191
29 Hong Kong 39,916
30 Portugal 39,095
31 Japan 34,666
32 Turkey 33,767
33 Russia 32,630
34 Romania 31,259
35 Thailand 29,592
36 Argentina 29,268
37 Israel 26,322
38 China 25,496
39 Vietnam 25,049
40 Czech Republic 24,159
41 Austria 23,539
42 Hungary 20,056
43 Croatia 16,139
44 Serbia 16,089
45 Slovenia 14,109
46 South Korea 14,089
47 Slovakia 13,657
48 United Arab Emirates 13,454
49 Taiwan 13,260
50 Ukraine 12,956
Posted by: Norbert

Re: Steinway Hall in NY - Sold? - 11/17/12 01:27 PM

Quote:
NY Steinway is a great instrument, not any less than a Hamburg. We can argue over the differences, but I doubt there is a pianist from anywhere in the world, including China, who wouldn't fall in love with any properly working and tuned Steinway, whether it be form NY or Germany.


Not so sure of this.

I know of several local pianists who went to great length obtaining Hamburgs from Germany.

Some German symphony orchestras I know replace their Hamburgs every 2 years and there seem always keen eyes out for some of those, also very much from this continent.

This is not to say that there aren't great New Yorks out there - of course there are, but 100% "made in Germany" still carries its weight around the world.

Especially in China..

Norbert
Posted by: Plowboy

Re: Steinway Hall in NY - Sold? - 11/17/12 01:35 PM

Originally Posted By: Norbert
... but 100% "made in Germany" still carries its weight around the world.


That's "made in Germany" by an American company.
Posted by: nylawbiz

Re: Steinway Hall in NY - Sold? - 11/17/12 01:44 PM

If more of the world was exposed to NY Steinways, NY Steinways would have equal esteem with German pianos. I assure you, among the billions of Chinese, there will be plenty of devotees to NY Steinways who can gobble up the existing population of NY pianos, plus the next 100 years worth of future production, at Steinway's current production levels. How long will this take, I haven't a clue.

Here are two hypothetical questions: If Steinway was able to move their production to China, and train workers there the methods and systems used in Astoria and Hamburg, how many pianos would they sell a year? Again, just for fun, imagine Steinway transplanting the Astoria factory, lock, stock and barrel with staff to China. How long would it take to train 20,000 Chinese craftsman to make the pianos exactly like they make them in New York or Germany?

Thank you Lang Lang!
Posted by: pianoloverus

Re: Steinway Hall - 11/17/12 02:51 PM

Originally Posted By: nylawbiz
End of an era. Is this the beginning of the dismantling of Steinway & Sons as we know it? I have a hard time imagining that an Asian owner really cares or even understands what the S&S building, no less S&S itself means to Americans, New Yorkers and American pianists. In addition to the iconic brand, S&S also represents our glimmer of hope that America can still manufacturer a world class product, even in New York City.

If in fact Astoria is only putting out 1,500 pianos a year, things are very dire indeed for this great institution. How long can the factory exist? Having taken the tour of the factory earlier this year and seeing the size and complication of the plant is amazing. And probably amazingly expensive to maintain, especially in Queens. I'm afraid the writing is on the wall that future viewers of "Note By Note" will view it as a quaint historical memoir, instead of a documentary on a contemporary subject.

At least we will have all the Steinway pianos out there as testament of what was, even into the 21st century. That's if any pianos remain here in the United States, as opposed to most of them eventually being gobbled up and sent overseas to China and the Pacific Rim. China is already Steinway's biggest customer. With the Chinese population growing and becoming more prosperous, the demand for Steinways in the East will continue, even with the demise of S&S as we know it. So, it may come a day when a Steinway piano in North America may become as rare as hens' teeth.

This will be a boom to the rebuilders, but probably a big blow to the popularity of piano playing, so in the end, no one winds (except maybe Samick).

So sad and there is nothing we can do to stop the eventuality.
Completely idle speculation which seems to be totally or at least largely false based on on Bob Snyder's post.

Those familiar with Steinway's history know there have been many ups and downs with some of those difficult periods probably far worse than the present one. I don't understand why some seem so eager to be the bearers of doom.
Posted by: Steve Cohen

Re: Steinway Hall - 11/17/12 04:22 PM

Originally Posted By: Bob Snyder
Hello everyone -
There is not too much I can add at this point - other than to say that the announcement as reported by MMR is correct. Please remember that the building was sold once before - but we remained as tenants - and ultimately repurchased the building. The sky didn't fall, and the world did not come to an end. Nor will it this time, should this sale close.

We are certainly committed to the New York market, and will continue to have a major presence there.

As a 31 year Steinway & Sons employee, I can appreciate both sides of this. Steinway Hall is a facility that has been much more than a retail store, that's for sure. Yet if we step back and look at this objectively, it is not unreasonable for a company to look at all the factors involved in such a decision - then make the decision that they believe to ultimately be in the company's best interest. In fact, it would be irresponsible NOT to do so.

Lastly, and in response to the comments above that suggest this decision is indicative that Steinway is on the way out: nothing could be further from the truth. We've been around a long time - and have weathered many storms (including the very recent and literal storm). As far as whether this is the beginning of "the dismantling of Steinway & Sons": absolutely not! Our factory remains very busy, and our company continues to be profitable. the number of retail stores we now own is much higher than was the case 10 years ago. This has to do with one specific (an incredibly well known) retail location. It by no means suggests anything beyond that as to the overall future of Steinway & Sons - other than that our commitment to remain and thrive has not changed. Consider New York just for one last minute: 20 years ago, we had one major location. Today, we have four.

Our commitment to the New York retail market has grown; it has not diminished, nor will it.

I appreciate the fact that so many care about this. Thank you.


I have spoken to a number of industry pros and what Bob says ring true. Steinway insn't going anywhere.

My guess is the the realestate value of Steinway Hall exceeded the advantages Steinway could realize staying in that location.
Posted by: nylawbiz

Re: Steinway Hall - 11/18/12 10:36 AM

Originally Posted By: pianoloverus
Originally Posted By: nylawbiz
End of an era. Is this the beginning of the dismantling of Steinway & Sons as we know it? I have a hard time imagining that an Asian owner really cares or even understands what the S&S building, no less S&S itself means to Americans, New Yorkers and American pianists. In addition to the iconic brand, S&S also represents our glimmer of hope that America can still manufacturer a world class product, even in New York City.

If in fact Astoria is only putting out 1,500 pianos a year, things are very dire indeed for this great institution. How long can the factory exist? Having taken the tour of the factory earlier this year and seeing the size and complication of the plant is amazing. And probably amazingly expensive to maintain, especially in Queens. I'm afraid the writing is on the wall that future viewers of "Note By Note" will view it as a quaint historical memoir, instead of a documentary on a contemporary subject.

At least we will have all the Steinway pianos out there as testament of what was, even into the 21st century. That's if any pianos remain here in the United States, as opposed to most of them eventually being gobbled up and sent overseas to China and the Pacific Rim. China is already Steinway's biggest customer. With the Chinese population growing and becoming more prosperous, the demand for Steinways in the East will continue, even with the demise of S&S as we know it. So, it may come a day when a Steinway piano in North America may become as rare as hens' teeth.

This will be a boom to the rebuilders, but probably a big blow to the popularity of piano playing, so in the end, no one winds (except maybe Samick).

So sad and there is nothing we can do to stop the eventuality.
Completely idle speculation which seems to be totally or at least largely false based on on Bob Snyder's post.

Those familiar with Steinway's history know there have been many ups and downs with some of those difficult periods probably far worse than the present one. I don't understand why some seem so eager to be the bearers of doom.


As the man says, "past performance is no indication of future results." The past machinations of S&S was when it was either a family owned company, or an American owned company. Times are different. S&S is controlled by a corporation with a different ethos than traditional values of American companies. Not to put Samick down (I really know little about them) but the days when S&S ran the business like a family are over. I cannot imagine that the current owners have any real commitment to New York, the United States, or American workers for that matter. Like most large businesses these days there are purely profit driven, focusing on short term profit goals, not long term goals. why would Samick keep Astoria going, if the majority of their customers are 8,000-10,000 miles away with strict import duties? Just makes total business sense to move production to China. At least at some point in the future. This is not what I hope for, but obviously you and I have no say in this, it is just seems the logical expectation from a country that is based in the Far East.

Does anyone dispute that the vast majority of pianos sales over the next 50 years will be in China and the Far East?

Can the Western Hemisphere support the Astoria factory? Can Astoria be profitable? Seems like a behemoth from an earlier era.

I believe that unless S&S is able to manufacture goods in Astoria that can be sold to a greater portion of the American buying public, it has to be on borrowed time, at best. I suggest that S&S use the Astoria factory to manufacture goods which is accessible to more American consumers. Maybe accessories for pianos (benches, music cabinets, lighting) or even market piano related paraphernalia such as artwork, collectibles, and memorabilia. I mean, they can even make artwork out of mounted action parts. Jewelry out of piano components. Things that a Steinway aficionado would purchase.

I presume that a large majority of US S&S sales are to institutions, not individuals. Steinway needs to offer American made products for the general consumer. $60,000-$130,000 sales are great, but in between those sales, there is nothing wrong with selling some lower ticket items (as they do with parts sales). Anything that does not diminish the prestige of the brand, while at the same time utilizing more of the factory and workers in Astoria.
Posted by: nylawbiz

Re: Steinway Hall - 11/18/12 10:38 AM

[/quote] My guess is the the real estate value of Steinway Hall exceeded the advantages Steinway could realize staying in that location. [/quote]

Couldn't the same be said of the Astoria factory?
Posted by: Grotriman

Re: Steinway Hall - 11/18/12 11:20 AM

Originally Posted By: nylawbiz
[/quote] My guess is the the real estate value of Steinway Hall exceeded the advantages Steinway could realize staying in that location.


Couldn't the same be said of the Astoria factory? [/quote]

No.

Midtown real estate is far more expensive than Astoria Queens. By my calculations, they would need to sell 1/3 of their entire annual production out of the NYC Midtown location in order to break even. Not likely given the number of retail locations in the rest of the United States.

Whereas the location is nice and the entire process of getting registered to go in etc is "exclusive". I imagine they get nowhere near the traffic they would if they had a smaller store on 58th street like the other piano stores in NYC. They need to change their marketing from "are you qualified to spend what we are demanding?" to "we make the very best so you should your spend your piano dollars here".
Posted by: pianoloverus

Re: Steinway Hall - 11/18/12 11:41 AM

Originally Posted By: nylawbiz
Originally Posted By: pianoloverus
Originally Posted By: nylawbiz
End of an era. Is this the beginning of the dismantling of Steinway & Sons as we know it? I have a hard time imagining that an Asian owner really cares or even understands what the S&S building, no less S&S itself means to Americans, New Yorkers and American pianists. In addition to the iconic brand, S&S also represents our glimmer of hope that America can still manufacturer a world class product, even in New York City.

If in fact Astoria is only putting out 1,500 pianos a year, things are very dire indeed for this great institution. How long can the factory exist? Having taken the tour of the factory earlier this year and seeing the size and complication of the plant is amazing. And probably amazingly expensive to maintain, especially in Queens. I'm afraid the writing is on the wall that future viewers of "Note By Note" will view it as a quaint historical memoir, instead of a documentary on a contemporary subject.

At least we will have all the Steinway pianos out there as testament of what was, even into the 21st century. That's if any pianos remain here in the United States, as opposed to most of them eventually being gobbled up and sent overseas to China and the Pacific Rim. China is already Steinway's biggest customer. With the Chinese population growing and becoming more prosperous, the demand for Steinways in the East will continue, even with the demise of S&S as we know it. So, it may come a day when a Steinway piano in North America may become as rare as hens' teeth.

This will be a boom to the rebuilders, but probably a big blow to the popularity of piano playing, so in the end, no one winds (except maybe Samick).

So sad and there is nothing we can do to stop the eventuality.
Completely idle speculation which seems to be totally or at least largely false based on on Bob Snyder's post.

Those familiar with Steinway's history know there have been many ups and downs with some of those difficult periods probably far worse than the present one. I don't understand why some seem so eager to be the bearers of doom.


As the man says, "past performance is no indication of future results." The past machinations of S&S was when it was either a family owned company, or an American owned company. Times are different. S&S is controlled by a corporation with a different ethos than traditional values of American companies. Not to put Samick down (I really know little about them) but the days when S&S ran the business like a family are over. I cannot imagine that the current owners have any real commitment to New York, the United States, or American workers for that matter. Like most large businesses these days there are purely profit driven, focusing on short term profit goals, not long term goals. why would Samick keep Astoria going, if the majority of their customers are 8,000-10,000 miles away with strict import duties? Just makes total business sense to move production to China. At least at some point in the future. This is not what I hope for, but obviously you and I have no say in this, it is just seems the logical expectation from a country that is based in the Far East.

Does anyone dispute that the vast majority of pianos sales over the next 50 years will be in China and the Far East?

Can the Western Hemisphere support the Astoria factory? Can Astoria be profitable? Seems like a behemoth from an earlier era.

I believe that unless S&S is able to manufacture goods in Astoria that can be sold to a greater portion of the American buying public, it has to be on borrowed time, at best. I suggest that S&S use the Astoria factory to manufacture goods which is accessible to more American consumers. Maybe accessories for pianos (benches, music cabinets, lighting) or even market piano related paraphernalia such as artwork, collectibles, and memorabilia. I mean, they can even make artwork out of mounted action parts. Jewelry out of piano components. Things that a Steinway aficionado would purchase.

I presume that a large majority of US S&S sales are to institutions, not individuals. Steinway needs to offer American made products for the general consumer. $60,000-$130,000 sales are great, but in between those sales, there is nothing wrong with selling some lower ticket items (as they do with parts sales). Anything that does not diminish the prestige of the brand, while at the same time utilizing more of the factory and workers in Astoria.
I see the fact that your first lengthy post was shown to be mostly/entirely incorrect hasn't discouraged you from further idle speculation.
Posted by: Piano World

Re: Steinway Hall - 11/18/12 12:09 PM

Enough with the guesses and speculation folks.

I don't think it would matter if Steinway was family owned, U.S. company owned, non- U.S. owned, a combination, or whatever. Whoever owns the company would want to do what they had to in order to survive and succeed.
In the end the important thing to me is that we don't lose any more venerable old piano manufacturers (and we hopefully keep jobs here in the U.S.).
Posted by: sophial

Re: Steinway Hall - 11/18/12 12:58 PM

Originally Posted By: pianoloverus
Originally Posted By: nylawbiz
Originally Posted By: pianoloverus
Originally Posted By: nylawbiz
End of an era. Is this the beginning of the dismantling of Steinway & Sons as we know it? I have a hard time imagining that an Asian owner really cares or even understands what the S&S building, no less S&S itself means to Americans, New Yorkers and American pianists. In addition to the iconic brand, S&S also represents our glimmer of hope that America can still manufacturer a world class product, even in New York City.

If in fact Astoria is only putting out 1,500 pianos a year, things are very dire indeed for this great institution. How long can the factory exist? Having taken the tour of the factory earlier this year and seeing the size and complication of the plant is amazing. And probably amazingly expensive to maintain, especially in Queens. I'm afraid the writing is on the wall that future viewers of "Note By Note" will view it as a quaint historical memoir, instead of a documentary on a contemporary subject.

At least we will have all the Steinway pianos out there as testament of what was, even into the 21st century. That's if any pianos remain here in the United States, as opposed to most of them eventually being gobbled up and sent overseas to China and the Pacific Rim. China is already Steinway's biggest customer. With the Chinese population growing and becoming more prosperous, the demand for Steinways in the East will continue, even with the demise of S&S as we know it. So, it may come a day when a Steinway piano in North America may become as rare as hens' teeth.

This will be a boom to the rebuilders, but probably a big blow to the popularity of piano playing, so in the end, no one winds (except maybe Samick).

So sad and there is nothing we can do to stop the eventuality.
Completely idle speculation which seems to be totally or at least largely false based on on Bob Snyder's post.

Those familiar with Steinway's history know there have been many ups and downs with some of those difficult periods probably far worse than the present one. I don't understand why some seem so eager to be the bearers of doom.


As the man says, "past performance is no indication of future results." The past machinations of S&S was when it was either a family owned company, or an American owned company. Times are different. S&S is controlled by a corporation with a different ethos than traditional values of American companies. Not to put Samick down (I really know little about them) but the days when S&S ran the business like a family are over. I cannot imagine that the current owners have any real commitment to New York, the United States, or American workers for that matter. Like most large businesses these days there are purely profit driven, focusing on short term profit goals, not long term goals. why would Samick keep Astoria going, if the majority of their customers are 8,000-10,000 miles away with strict import duties? Just makes total business sense to move production to China. At least at some point in the future. This is not what I hope for, but obviously you and I have no say in this, it is just seems the logical expectation from a country that is based in the Far East.

Does anyone dispute that the vast majority of pianos sales over the next 50 years will be in China and the Far East?

Can the Western Hemisphere support the Astoria factory? Can Astoria be profitable? Seems like a behemoth from an earlier era.

I believe that unless S&S is able to manufacture goods in Astoria that can be sold to a greater portion of the American buying public, it has to be on borrowed time, at best. I suggest that S&S use the Astoria factory to manufacture goods which is accessible to more American consumers. Maybe accessories for pianos (benches, music cabinets, lighting) or even market piano related paraphernalia such as artwork, collectibles, and memorabilia. I mean, they can even make artwork out of mounted action parts. Jewelry out of piano components. Things that a Steinway aficionado would purchase.

I presume that a large majority of US S&S sales are to institutions, not individuals. Steinway needs to offer American made products for the general consumer. $60,000-$130,000 sales are great, but in between those sales, there is nothing wrong with selling some lower ticket items (as they do with parts sales). Anything that does not diminish the prestige of the brand, while at the same time utilizing more of the factory and workers in Astoria.
I see the fact that your first lengthy post was shown to be mostly/entirely incorrect hasn't discouraged you from further idle speculation.



Right, let's slow down here . We don't even know if Steinway is leaving the hall yet, let alone any other changes. wow, talk about getting ahead of the facts....

and to my knowledge, Samick does not have controlling ownership of Steinway.
Plus even if that were to happen S&S might be just fine. It does seem that Bosendorfer is somehow surviving under Yamaha's ownership and maintaining its identity and quality. The sky is not falling at this point.
Posted by: turandot

Re: Steinway Hall - 11/18/12 02:15 PM

Originally Posted By: sophial

and to my knowledge, Samick does not have controlling ownership of Steinway.


That's my recollection as well. At the time of the purchase, it was a minority interest, and more significantly, the shares issued were non-voting shares. Kirkland and Messina had a strenglehold on voting shares at the time.

The flap here seems to be about whether Steinway needs to be in a gilded palace in mid-Manhattan in order to sell its pianos into its local market. I doubt it, and don't understand that feeling, but maybe Woody Allen could explain it.
Posted by: Plowboy

Re: Steinway Hall - 11/18/12 06:02 PM

Originally Posted By: nylawbiz
Can Astoria be profitable?


Their latest balance sheet shows gross profit of $29 million. That includes New York, Hamburg and the band division.

Kirkland and Messina gave up those voting shares, Turandot.
Posted by: Bob

Re: Steinway Hall - 11/18/12 08:19 PM

A company has to change when the market changes, or the market will eat them up. Steinway management is smart enough to change with the market. I see this as a financial positive for the company, that outweighs the proximity to Carnegie Hall. I'm confident Steinway has a solid plan going forward.

And.......... it doesn't take 20,000 employees to make a Steinway piano.
Posted by: newgeneration

Re: Steinway Hall - 11/19/12 12:12 AM

I'm all for jobs staying in North America but I do question the earlier thought that NY Steinways are equal to the other premium pianos primarily from Europe.

It is not uncommon to hear stories in the industry that for example, of 10 new Steinway pianos manufactured, 6 or 7 really shine with the character that their brand is known for. The other 3 or 4 don't provide quite the same impression. I've heard this more than once and it often makes me wonder - how has the company survived this long when 20-30% of its production is noticeably less stellar than what the other 70-80% is recognized for? If 20-30% of all the Mercedes that were manufactured did not perform to the expectations of the buying consumers, that would be considered a massive issue for the auto maker.

Even so, I echo the voices of reason that point out that the Steinway Hall sale shouldn't in any way suggest a beginning of the dismantling of S&S in America. Business decisions are likely being made with consideration of what will benefit the company to help keep it strong moving forward.
Posted by: nylawbiz

Re: Steinway Hall - 11/19/12 08:51 AM

I hope my prognostications are not true, but only time will tell. I suggest that unless you tour the factory and see what actually is going on there, it is impossible to gauge the under utilization of a very large manufacturing plant. I think at one time the factory had many, many more workers then they do now.

Here are some facts:

1 Steinway Place, Astoria is actually owned by the New York City Industrial Development Agency. S&S has the property in a PILOT Program (Payment in Lieu of Taxes), a form of industrial incentive for NYC manufactures. The assessed value of the property is $25,500,000.00. To mitigate the real estate taxes on the property, the deed to the property has been transferred to the NYCIDA, which is tax exempt. Without the PILOT program, the annual real estate tax bill of the plant would be $2.5 million. Under the PILOT program, it is reduced to $250.000.00. Under the normal terms of a PILOT, at the end of the PILOT, the deed to the property reverts back to the original owner.

Under the terms of the PILOT that S&S has agreed to, there were supposed to retain 616 jobs, and create 89 new jobs. As per the 2012 annual report, they only show 383 jobs, a net loss of 233 jobs. The PILOT went into effect 1999, and is scheduled to expire in 2026. However, if they do not maintain the jobs they agreed to, they could lose the PILOT deal, which would result in their real estate taxes going up ten fold.

To see this information, go to:

http://www.nycedc.com/sites/default/files/filemanager/Compliance/IDA/FY2012_Annual_Report_IDA.pdf

and navigate to page 451.

If S&S continues to reduce their payroll, they face the good chance that they would lose their PILOT. If that happens, I bet dollars to donuts that they are out of there!

Does anyone know actually how many people are currently employed at S&S in NYC?
Posted by: Jonathan Baker

Re: Steinway Hall - 11/28/12 09:24 PM

Just a few dozen yards from Steinway Hall is 57 West 57th Street, a building not yet complete but already notorious: catering to billionaires, this building is already sold out, and promises to be not only the tallest apartment building in NYC, but the most expensive apartment building in the world, with individual apartments reportedly selling for up to $90 million.

In such a neighborhood, Steinway property is hot merchandise in the real estate market. Very hot. Whether the building remains standing as is or is replaced by another condominium expressly for the ruling class remains to be seen. Living in walking distance from Steinway at 57th Street, I will miss it on a sentimental level - it was, after all, the meeting place for every pianist of distinction for many decades, from Paderewski to Rachmaninoff to Horowitz to whomever your favorite today may be. The place has karma big time.
Posted by: Piano World

Re: Steinway Hall - 11/28/12 09:31 PM

Interesting Jonathan, thanks for posting.

I remember when McGraw-Hill sold one of their major buildings (the one on Sixth Ave. I believe) because they
couldn't pass the opportunity to make big money on the sale. Then they took long term favorable leases on the space they still needed.

I agree, you can feel the presence of great pianist in the 57th Street building.
Posted by: pianoloverus

Re: Steinway Hall - 11/28/12 09:42 PM

Originally Posted By: nylawbiz
I hope my prognostications are not true, but only time will tell. I suggest that unless you tour the factory and see what actually is going on there, it is impossible to gauge the under utilization of a very large manufacturing plant. I think at one time the factory had many, many more workers then they do now.

Here are some facts:

1 Steinway Place, Astoria is actually owned by the New York City Industrial Development Agency. S&S has the property in a PILOT Program (Payment in Lieu of Taxes), a form of industrial incentive for NYC manufactures. The assessed value of the property is $25,500,000.00. To mitigate the real estate taxes on the property, the deed to the property has been transferred to the NYCIDA, which is tax exempt. Without the PILOT program, the annual real estate tax bill of the plant would be $2.5 million. Under the PILOT program, it is reduced to $250.000.00. Under the normal terms of a PILOT, at the end of the PILOT, the deed to the property reverts back to the original owner.

Under the terms of the PILOT that S&S has agreed to, there were supposed to retain 616 jobs, and create 89 new jobs. As per the 2012 annual report, they only show 383 jobs, a net loss of 233 jobs. The PILOT went into effect 1999, and is scheduled to expire in 2026. However, if they do not maintain the jobs they agreed to, they could lose the PILOT deal, which would result in their real estate taxes going up ten fold.

To see this information, go to:

http://www.nycedc.com/sites/default/files/filemanager/Compliance/IDA/FY2012_Annual_Report_IDA.pdf

and navigate to page 451.

If S&S continues to reduce their payroll, they face the good chance that they would lose their PILOT. If that happens, I bet dollars to donuts that they are out of there!

Does anyone know actually how many people are currently employed at S&S in NYC?
Despite your disclaimer, you seem very happy to make dire predictions about Steinway. As if you couldn't care less and are more interested in showing your ability to gauge the economic future of the company.
Posted by: nylawbiz

Re: Steinway Hall - 11/29/12 05:19 AM

Pinaoloverus, I don't think I have a monopoly of making predictions on here. I didn't know I needed your permission to express an opinion on here - my bad. Is it because you consider my prediction "dire" that makes it impermissible? Is it merely because you decided you don't like my opinion that makes it taboo? Please let me know how you acquired the special right to express an opinion, so someday I can aspire to be like you, and permitted to opine on here and deride those who I disagree with.

I know many who are as devoted to S&S as I am, but I know no one more devoted. I am not happy at all about my prediction, and I hope I am wrong. My hopes and feelings doesn't change facts. Public opinion can change corporate action, and providing FACTS on here can only help shape people's opinions if such people are designed intelligently enough to consider all the facts.

I do not have any special ability to "gauge the future of the company," just some basic internet research that anyone can do.

Pianoloverus, to paraphrase another esteemed member on here, it is as if you couldn't care less and are more interested in showing your ability to make snide remarks instead of making meaningful contributions to a discussion.
Posted by: pianoloverus

Re: Steinway Hall - 11/29/12 08:59 AM

Originally Posted By: nylawbiz
Pinaoloverus, I don't think I have a monopoly of making predictions on here. I didn't know I needed your permission to express an opinion on here - my bad.
You don't need my permission. I was just commenting on what seems like, based on the content and tone of several of the posts you made on this thread, your lack of concern about Steinway and greater concern about your predictive abilities about their future. That's the strong impression your posts gave to me.
Posted by: Piano World

Re: Steinway Hall - 11/29/12 09:27 AM

And another thread dissolves into petty bickering.

Grow up folks.

Thread Closed.