Even though the classical music economic climate might look chilly to some observers, it seems that forecast doesn’t extend to the luxury piano market where a private equity firm, Kohlberg & Company, recently purchased Steinway & Sons for $438 million.
Although there was some reasonable trepidation from musicians and classical music presenters over the announcement, it appears that the new owners are actually looking to expand production and maintain existing quality standards.
An article by Corinne Ramey in the 7/11/2013 edition of the Wall Street Journal examines the sale in closer detail and includes a bit of reference content from me about the turnaround time for realizing gains in expanding the master piano maker workforce and pushing into Eastern European and Asian markets.
In short, Steinway’s new owners have a bit of time before realizing the fruits of investing in expanded production so concerns over the purchase being designed to generate a quick profit by chopping the company up or using the brand name to begin selling lower quality instruments is likely unfounded.
The only sale related wrinkle so far is a lawsuit filed by one Steinway stockholder who alleges the company gave Kohlberg & Company a sweetheart deal and should have settled for a higher price per share.
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It’s great to hear that the new investors are so interested in growing Steinway. When I first read about the acquisition, I thought about the craftspeople working all those years to make these amazing instruments/machines.
If you haven’t seen it yet, I’d recommend checking out this documentary on Netflix: http://movies.netflix.com/WiMovie/Note_by_Note_The_Making_of_Steinway_L1037/70082641?locale=en-US
It’s called Note by Note: The Making of Steinway L1037. It follows the year-long process of creating a piano from lumber The people that work there seem to be dedicated and proud (and sometimes a bit eccentric, but who am I to judge?).