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Re: Steinway & Sons Purchases Renner
Rich Galassini #2875725 08/03/19 02:15 PM
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Originally Posted by Rich Galassini
Originally Posted by joe80
Does this mean NY will use Hamburg parts?


We shall see.... smile


Hey, it occurred to me that having a Renner action was a big distinction between the regular Baldwin Artist grands, and the SF & SD models, same as NY & Hamburg Steinways! wink


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Re: Steinway & Sons Purchases Renner
Grand Piano Haus #2875757 08/03/19 04:10 PM
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Smart move. But entirely business based. Increasing value of a company is best way before selling. Will this be the next shock as time goes by? Time will tell...
Norbert😌


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Re: Steinway & Sons Purchases Renner
Norbert #2875842 08/03/19 09:57 PM
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Originally Posted by Norbert
Smart move. But entirely business based. Increasing value of a company is best way before selling. Will this be the next shock as time goes by? Time will tell...
Norbert😌

Which means Paulson may be trying to sell Steinway. Oh man...
There has been speculation a while ago that Steinway may be entertaining offers from Chinese investors. I think the below article has been covered here in our forums back then. This acquisition may be more evidence that they are committed to Steinway changing hands.

https://www.bloomberg.com/news/arti...d-to-attract-chinese-suitor-for-steinway

Re: Steinway & Sons Purchases Renner
Grand Piano Haus #2876062 08/04/19 03:03 PM
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The higher the esteem, the more are Chinese interested buying these companies. Mercedes has already Chinese shares and so have many other German companies. Often, they tried to buy the company outright. Especially at a time of real or threatened tariffs plus grossly widened market share in their own country, ownership and especially production of such goods in China makes perfect sense. With a widely established customer base being the backbone. Thinking of Volvo. It's exactly seems to be the direction we're headed. You can't win a trade war with anybody, least of all China. And companies will always act as companies do, trying to come out on top themselves. Living in interesting times...
Norbert

Last edited by Norbert; 08/04/19 03:12 PM.

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Re: Steinway & Sons Purchases Renner
Norbert #2876065 08/04/19 03:10 PM
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Originally Posted by Norbert
Smart move. But entirely business based. Increasing value of a company is best way before selling. Will this be the next shock as time goes by? Time will tell...
Norbert😌


I am not sure of the details in this transaction Norbert. It could have been a net zero or worse move for Steinway at this time. Future equity and a way to increase their share of business in the industry as their unit sales decrease could have been the goal. I believe that was the thinking in purchasing Kluge.

Own the vendor, broaden market share, and decrease cost all at once. Not a bad move, but it does not usually result in an immediately higher gross value (after the investment of purchase).

My 2 cents,


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Re: Steinway & Sons Purchases Renner
Rich Galassini #2876104 08/04/19 05:52 PM
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Rich is right. We should assume that the sale is a net zero transaction on its face. The company is worth X, and Steinway traded X amount for the company. Now, it's feasible that both groups value the company differently, and even for both groups to feel like they came out ahead on the deal. That notwithstanding, the difference moving forward will to a large extent relate to the cash flows.

Hamburg will now effectively get their action parts at cost. That's not a completely "free" gain either, because Steinway presumably had the assets that they traded for Renner working for them in some capacity, even if it was just drawing interest in the bank.

NY Steinway already gets their actions at "cost," since they're produced in-house, but if switching to Renner was ever under consideration, it's an entirely different proposition now since their effective cost for Renner materials just went down.

And consider this: if they switch NY to Renner, they would increase Renner's production and thereby decrease the amount of fixed costs apportioned to each unit (i.e. profit per unit goes up, and Steinway's effective cost for Renner parts drops even further)!

I have no idea how many Steinway employees are engaged in making action parts, but they could be retrained, retired or something.

The above is an oversimplification of all the direct and indirect consequences, but this isn't the place for all the analytical esoterica.

Anyway, switching to Renner would certainly be one more step in standardizing the production between Astoria and Hamburg. It might even be a good thing for marketing.


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Re: Steinway & Sons Purchases Renner
Grand Piano Haus #2876135 08/04/19 07:38 PM
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As a mere piano nerd who’s never owned a Steinway I just wonder how this or if this has any impact on the overall piano market. After reading the fall and bankruptcy of Gibson and near financial disaster of Guitar Center, (I may have the financial stories crossed - can’t remember) the effects seem to ripple across the music industry. Will Renner continue to sell actions and parts to other piano makers or will they be monopolized to supply only Steinway? I would think, but I’m frequently wrong, that assuming Renner has shown financial and investment success, I hope Steinway wants to add a successful piano action and parts making into the Steinway portfolio and not change anything. I just really hope any changes to Renner are to the positive for everyone.


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Re: Steinway & Sons Purchases Renner
j&j #2876139 08/04/19 07:47 PM
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Originally Posted by j&j
Will Renner continue to sell actions and parts to other piano makers or will they be monopolized to supply only Steinway? I would think, but I’m frequently wrong, that assuming Renner has shown financial and investment success, I hope Steinway wants to add a successful piano action and parts making into the Steinway portfolio and not change anything.


Buying the company was an investment. One that won't easily be recouped by simply decreasing the cost of the actions provided to S&S. Additionally, Renner provides many more actions to other manufacturers and specialty actions to rebuilders and technicians.That is where the bulk of their revenue comes from.

If S&S bought Renner to put it into the red by discontinuing support of others and effectively destroy the company, it would not help them. There are other fine action builders that could ramp up somewhat to provide actions, like Abel.

My 2 more cents,


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Re: Steinway & Sons Purchases Renner
Rich Galassini #2876144 08/04/19 07:53 PM
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Originally Posted by Rich Galassini
Originally Posted by j&j
Will Renner continue to sell actions and parts to other piano makers or will they be monopolized to supply only Steinway? I would think, but I’m frequently wrong, that assuming Renner has shown financial and investment success, I hope Steinway wants to add a successful piano action and parts making into the Steinway portfolio and not change anything.


Buying the company was an investment. One that won't easily be recouped by simply decreasing the cost of the actions provided to S&S. Additionally, Renner provides many more actions to other manufacturers and specialty actions to rebuilders and technicians.That is where the bulk of their revenue comes from.

If S&S bought Renner to put it into the red by discontinuing support of others and effectively destroy the company, it would not help them. There are other fine action builders that could ramp up somewhat to provide actions, like Abel.

My 2 more cents,

Thanks Rich - It makes perfect sense for that to be the case. In recent months its hard to be sure that saner minds will prevail. grin


J & J
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Re: Steinway & Sons Purchases Renner
Retsacnal #2876154 08/04/19 08:36 PM
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Originally Posted by Retsacnal
Hamburg will now effectively get their action parts at cost. That's not a completely "free" gain either, because Steinway presumably had the assets that they traded for Renner working for them in some capacity, even if it was just drawing interest in the bank.

NY Steinway already gets their actions at "cost," since they're produced in-house, but if switching to Renner was ever under consideration, it's an entirely different proposition now since their effective cost for Renner materials just went down.

And consider this: if they switch NY to Renner, they would increase Renner's production and thereby decrease the amount of fixed costs apportioned to each unit (i.e. profit per unit goes up, and Steinway's effective cost for Renner parts drops even further)!

Will we see the end of the era of NY's with in-house actions? Though many would welcome Renner NY's, a part of me, the once-piano-nerd who aspires to own a decent instrument down the line, will miss the NY's with in-house actions.

Re: Steinway & Sons Purchases Renner
Grand Piano Haus #2876172 08/04/19 09:46 PM
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I think it was already mentioned up-thread, but the linked article says that the intention is for Renner to continue to operate independently, and to continue to serve existing customers. It also says that all 200 employees' jobs are protected, and Renner will continue to be "made in Germany."

As Rich suggested, it would not help Steinway for Renner to stop serving other customers. It would be irrational to buy a company, cut it's income and drive up your own costs for their products. But there must be Steinway specific reasons to buy the company, because if all they wanted was max ROI they could invest in more profitable and more diverse things.

I think two of the usual reasons for vertical integration are germane here: reducing costs and controlling the supply chain. It's an ironic byproduct that other manufacturers will be helping to shore up Steinway.


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Re: Steinway & Sons Purchases Renner
Grand Piano Haus #2876200 08/05/19 01:04 AM
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I still believe that this was primarily to increase Steinways corporate value as a company. The rumours about possible Chinese buyers may or may not prove correct. By the way its not about “Chinese” or anybody else. But highest bidders. Should any bidding at all be happening. One can of course speculate who would be interested to do so and why. Should such be the case, I doubt however, Mason Hamlin or Sauter would be the main suspects.
Norbert

Last edited by Norbert; 08/05/19 01:12 AM.

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Re: Steinway & Sons Purchases Renner
Grand Piano Haus #2876207 08/05/19 02:19 AM
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The action in my Sauter says Renner and the hammers Abel.I wonder what action Sauter will use now ? Is there an Abel action I wonder ?

Re: Steinway & Sons Purchases Renner
Grand Piano Haus #2876213 08/05/19 04:12 AM
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Keep in mind that Spirio-equipped pianos now account for 40% or more of Steinway's sales. With the release earlier this year of their next-generation system Spirio | r, adding recording capability, Steinway had to deal with the problem of producing two variants of the recording hardware that attaches to the top of the action to measure hammer velocities. Standardizing on Renner actions for both U.S. and Hamburg Steinways would simplify the integration of Spirio going forward, so this may have been one factor driving the acquisition.

Re: Steinway & Sons Purchases Renner
Lady Bird #2876220 08/05/19 04:51 AM
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Originally Posted by Lady Bird
The action in my Sauter says Renner and the hammers Abel.I wonder what action Sauter will use now ? Is there an Abel action I wonder ?


Abel builds actions, Lady Bird, but as I have said, I doubt that S&S bought Renner to spoil it's business. That would not be a smart move, IMHO. Read the earlier posts please.


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Re: Steinway & Sons Purchases Renner
Rich Galassini #2876222 08/05/19 05:02 AM
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Originally Posted by Rich Galassini
Originally Posted by Lady Bird
The action in my Sauter says Renner and the hammers Abel.I wonder what action Sauter will use now ? Is there an Abel action I wonder ?


Abel builds actions, Lady Bird, but as I have said, I doubt that S&S bought Renner to spoil it's business. That would not be a smart move, IMHO. Read the earlier posts please.

Sorry yes the headline was shock.Someone me said this to me today and here I am repeating
it.

Re: Steinway & Sons Purchases Renner
Mark Fontana #2876279 08/05/19 08:39 AM
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Originally Posted by Mark Fontana
Keep in mind that Spirio-equipped pianos now account for 40% or more of Steinway's sales. With the release earlier this year of their next-generation system Spirio | r, adding recording capability, Steinway had to deal with the problem of producing two variants of the recording hardware that attaches to the top of the action to measure hammer velocities. Standardizing on Renner actions for both U.S. and Hamburg Steinways would simplify the integration of Spirio going forward, so this may have been one factor driving the acquisition.

Wow! That’s news! I didn’t know the Spirio system was that popular. I’m remembering that other thread that someone was selling their recent model Steinway with a Spirio system but couldn’t figure out a way to transfer access to the Spirio library to the new owner. If Spirio is ordered on 40% of new Steinway’s, I guess S&S will have to figure out something for 2nd and 3rd owners of their pianos so-equipped. Who needs soap operas or Jerry Springer? 😄


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Re: Steinway & Sons Purchases Renner
j&j #2876316 08/05/19 10:39 AM
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Originally Posted by j&j
Originally Posted by Mark Fontana
Keep in mind that Spirio-equipped pianos now account for 40% or more of Steinway's sales. With the release earlier this year of their next-generation system Spirio | r, adding recording capability, Steinway had to deal with the problem of producing two variants of the recording hardware that attaches to the top of the action to measure hammer velocities. Standardizing on Renner actions for both U.S. and Hamburg Steinways would simplify the integration of Spirio going forward, so this may have been one factor driving the acquisition.

Wow! That’s news! I didn’t know the Spirio system was that popular. I’m remembering that other thread that someone was selling their recent model Steinway with a Spirio system but couldn’t figure out a way to transfer access to the Spirio library to the new owner. If Spirio is ordered on 40% of new Steinway’s, I guess S&S will have to figure out something for 2nd and 3rd owners of their pianos so-equipped. Who needs soap operas or Jerry Springer? 😄


Well J&J,

Keep in mind that Steinway is selling waaay less units than they did even in the early 2000's. In the recent past they were rotating closing the factory for a week or so each month. The Spirio may well have been the salvation of NY as it adds lots of revenue to a sale. I think they had a similar number of units (as a perecntage) with PianoDisc installed before the Spirio, but that didn't add nearly as much profit as a Spirio does (judging from the costs that Wayne Stahnke had when he marketed the product directly).

Given that the Spirio is a new product that they have spent tons of money marketing it, it is believable that 40% of their sales are Spirio pianos, even with the increase in cost. That may actually be a conservative number. But it may not be nearly as many units as you have in your mind, J&J.


Rich Galassini
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Re: Steinway & Sons Purchases Renner
Rich Galassini #2876330 08/05/19 11:19 AM
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Rich - Thank you for the insight. Truthfully I have no clue what the global market is for acoustic pianos, or the USA market. I also have no clue what percentage of the acoustic pianos sold come with a player system or silent system. As we forge forward in the digital age, I’m sure some type of digital enhancement will be included in more acoustic pianos.

Last edited by j&j; 08/05/19 11:20 AM.

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Re: Steinway & Sons Purchases Renner
Rich Galassini #2876478 08/05/19 07:17 PM
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Originally Posted by Rich Galassini
Originally Posted by Lady Bird
The action in my Sauter says Renner and the hammers Abel.I wonder what action Sauter will use now ? Is there an Abel action I wonder ?


Abel builds actions, Lady Bird, but as I have said, I doubt that S&S bought Renner to spoil it's business. That would not be a smart move, IMHO. Read the earlier posts please.

I never said that was thier motive for buying Renner. From what I have read in the past is S&S
tries to control what other manufacturers even call themselves .,Grotrian Steinweg for example.
In the past this included what pianists say about thier units.The list I am sure is long and very recently we read about what they are willing to supply rebuilders who OWN Sreinways
instruments. However I believe the great piano manufactures of Europe will find a way and
maintain quality without bully tactics.

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