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Do you really think they can sell enough pianos at that location to pay the rent? Evidently they're holding a mortgage for over $100 million. This means a monthly payment of over $100,000.00 for the mortgage at least. Add in the overhead of the half dozen people, heat, A/C, electric and tuning - and you are talking about another $150K per month. You'd have to sell a lot of pianos out of this location to justify that kind of expense. Assuming a 50% margin you are talking about more than $500,000 worth of pianos (40?) per month just to break even.
When Samick Corp. purchased an interest in Steinway some years back it was my understanding this gave Steinway Corp about 50 million in cash that was used to pay down debt.
A company that uses a capital injection for capital expenditures such as new equipment or upgrades to infrastructure is a good thing. A company that uses capital to stay afloat is not an indication of longevity.
Maybe they will turn around and just lease the place instead? Might be less expensive for them? Or, lease a smaller portion of it.
I don't understand why it would be so expensive to operate in a building you already own. Why would it be any cheaper to lease it? Maybe it's different in NY, but in Australia if you already own a building, you aren't up for too many more expenses and in the long run it can be very beneficial to have a stable location you can't be evicted from. Forced relocation can be very expensive. Do you have some kind of heavy land/building tax in NY or something?
It's my understanding that the Steinway family used to live there as their primary residence in addition to using it as a showroom. It really is disapointing to hear that landmark will no longer be part of Steinway.
My guess is the the realestate value of Steinway Hall exceeded the advantages Steinway could realize staying in that location.
I can imagine this to be true. And, it may also hold true for the Steinway factory property in Astoria at some point. I have been told that the real $ value of the factory lies in the land.
Quite a few years ago Bösendorfer moved production out of downtown Vienna to a sleepy town almost an hour's drive away, and retained a much smaller downtown location where the final voicing etc was done. This made a lot of economic sense, no doubt, and they could still profess to be based in the capital city. Bechstein did the exact same, benefiting from huge federal incentives to move production into a far eastern backwater near the Polish border, while maintaining a prestigious address in Berlin. Maybe S&S will eventually do the same?