Steinway & Sons to go public again

Steinway Musical Instruments, which also owns Conn-Selmer (including its Vincent Bach, Leblanc, Yanagisawa and Ludwig brands amongst others), has announced that it will be re-listed on the New York Stock Exchange after nine years operating as a private company.

The company was acquired by Hedge Fund Manager John Paulson in 2013, and after a period of sustained growth is predicted to be a strong performer as a publicly listed entity.  Under Paulson’s ownership there has been significant investment in technology, manufacturing processes and machinery, workforce training, and in company-owned showrooms.  The last of these has been a recurring approach to retail by Steinway alongside supplying carefully selected dealers, and it’s an approach also taken by C.Bechstein (which has recently opened a purpose-built new showroom, concert space and rehearsal rooms in Manchester, with work now begun on the new Bechstein Hall on Wigmore Street in London).

Steinway, as well as being legendary for the musical qualities of its instruments, also has a firmly entrenched identity as a global luxury brand, making it appealing to investors in a competitive market.

Steinway has strong ambitions for growth in China, the biggest market in the world for pianos, and this will be a crucial part of continued success and expansion, particularly as other markets have shown some contraction for piano sales in general.  This is helped significantly by the Chinese Government’s strong support for the development of musical talent.

The company also acknowledges the challenges that lie ahead, one of which is the need for training to preserve the skills it relies upon:

“Many of the skills we require are not typically taught in traditional universities or schools,” the prospectus observes. “For example, the process of bending the Steinway piano rim is an acquired skill and not widely taught. Similarly, the skills required to construct and repair our pianos are taught only in highly specialized trade schools or passed down from generation to generation.”

This speaks to some of the challenges faced here in the UK Musical Instruments space, where the shortage of skilled repairers to maintain and repair all types of instruments is becoming an ever-increasing issue.  There is now very little in terms of training in these skills across the UK, and it’s a difficult situation to address, requiring the whole industry to come together to provide apprenticeship and training opportunities.  We at the MIA continue to look at ways to facilitate this along with various partners, but it’s a rocky road and progress is slow.

Only time will tell how these challenges are met, but it’s an interesting and thought-provoking situation to consider.  If you have any thoughts on this please let Matt know so that we can add them to our research.

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