THE MARKETS Sales & Demographic Data on The

www.musictrades.com DECEMBER 2014 THE MARKETS THE RANKINGS THE PLAYERS Sales & Demographic The World’s Top 225 Profiles Of Data On The World’s Music Products Companies That Are Top Markets Companies Ranked Driving The Industry By Revenue GLOBAL MUSIC PRODUCTS MARKETS ing reflects management’s goal to offer exceptional pianos at every price point. The pianos are distributed throughout Europe, North America, and most recently, China through a network of partners. Chairman Karl Schulze explains, “Our goal has been to offer a range of products that deliver value for the money and will secure our market position over the longer term.” This long-term outlook has been sup- ported by a well over €35 million investment in buildings and equipment at the Seifhennersdorf and Hradec Kralove operations. High-tech comput- er controlled machinery is used in the production of metal parts, such as the cast iron frame, and basic wooden com- ponents including rim parts. The machinery shapes component parts to precise tolerances but hasn’t automated piano production. Rather it has freed up Workers at the modernized Seifhennersdorf, Germany plant, site of Bechstein pro- craftsmen for tasks such as action duction. The company produces its W.Hoffman line in Hradec Kralove in the Czech adjustment and regulating that require a Republic. skilled hand and a discerning ear. Both plants also boast precise climate control systems and acoustically optimized rooms for the intonation process, which BECHSTEIN reflects the emphasis on quality. Much of the global piano industry is awash in red ink, and the past decade PIANO GROUP has seen several high-profile European piano makers fold. Bechstein, however, Management, manufacturing facilities, and is a notable exception. Producing 4,000 pianos annually, the company earned a product line tailored for today’s global piano market €2.5 million after-tax profit last year and carries little debt. This happy state of affairs is the result of an illustrious “THE BECHSTEIN IS TO pianists The flagship C. Bechstein brand com- tradition and the energetic management what the Stradivarius is to violins,” bines the finest materials and crafts- of Schulze, who has headed the compa- declared Hans Von Bulow in 1857 after manship in limited production, crafting ny since 1986. he premiered Lizst’s B-minor piano exquisite grands and upright pianos for Born in 1826, Carl Bechstein began sonata to an enthusiastic audience in the most discerning players. Bechstein- apprenticing as a piano maker as a Berlin. In every decade since, branded grands and uprights offer a young boy. At 27, he set up his own acclaimed musicians around the world more affordable option for serious ama- workshop in Berlin, determined to cre- have consistently lavished praise on teurs and institutions. The W. Hoffman ate a new piano that had the volume and Bechstein pianos. The story of the com- brand is a mid-priced line, and the tonal quality to do justice to the emerg- pany behind the pianos, however, has Zimmerman brand addresses the entry- ing “romantic” style of music. His suc- not been quite so consistent, filled with level price point. All Bechstein branded cess could be measured by a collection triumphs, tragedies, and several close pianos are produced at a plant in of first prize medals from exhibitions brushes with disaster. Yet in 2014, as Seifhennersdorf, a small town in across the continent, along with the Bechstein celebrates its 161st anniver- Eastern Germany, outside of Dresden endorsements of musical titans like sary, the company is one of the world’s and near the Czech border. W.Hoffmann Franz Liszt and Richard Wagner. best-positioned piano makers, with a grand and upright pianos are produced Bechstein’s abilities as a design engi- revered trademark, highly efficient about 100 miles to the east in the Czech neer were matched by his business acu- manufacturing facilities, and a strong town of Hradec Kralove. Zimmerman men: By 1870, his company was one of management team in place. grands and uprights are designed by Europe’s largest piano makers, with two Today’s Bechstein organization has Bechstein pianos and produced in China plants in Berlin serving a clientele that four well-defined brands that offer under the supervision of a Bechstein included noted artists and royalty. Carl pianos for every segment of the market. quality team. The diverse product offer- Bechstein died in 1900, but the growth GLOBAL MUSIC PRODUCTS MARKETS to be the right decision.” In 2007, Schulze acquired the Bohemia Piano operation in Hradec Kralove, allowing him to begin production of lower-priced pianos that had pre- viously been outsourced. “The operation has given us control and the ability to create a distinct identity for the W.Hoffman brand,” he says. Bechstein shares have been traded publicly since 1996, and in 2003 Korean-based Samick made a substan- tial investment in the company. The The husband and wife team of Bechstein’s majority shareholder, relationship never worked as planned, Berenice Kuepper and Karl Schulze Stefan Freymuth, is taking an active and Bechstein ended up buying back its have structured Bechstein to compete role in management. shares. Starting in 2009 the Kuthe in a tough global piano market. Company, a Berlin real estate develop- and success of his company continued In many respects, Schulze resembles ment firm, began acquiring Bechstein under the management of his three sons, company founder Carl Bechstein. He shares, eventually acquiring much of Carl, Edwin, and Johannes. was attracted to the piano at an early age Schulze’s stake in the company. Kuthe Like every other piano maker in the and became a skilled technician. As the representative Stefan Freymuth is now world, Bechstein saw its sales volume owner of a successful piano retail busi- taking an active role in managing and finances collapse during the world- ness, he developed sales and marketing Bechstein. wide Depression of the 1930s. These skills and a sharp eye for finance. Schulze and Freymuth have a friendly, economic woes were followed by the Buying Bechstein presented a once-in- informal relationship based on what calamity of World War II, and at the a-lifetime opportunity to put these skills Schulze calls “the right chemistry.” War’s end in 1945, Bechstein’s piano to work. Although the purchase repre- Freymuth adds, “Our cooperation does- plants were in ruins. Despite diligent sented a considerable financial risk, he n’t need a formal framework, it just efforts by the Bechstein family, the explains, “It was a challenge I couldn’t works. We both have very similar points company never achieved its pre-war pass up.” of view. I don’t intend to fight the com- glory or production levels. In 1963, in The challenges of running the compa- pany or revolutionize its internal struc- need of a capital infusion, the family ny in the early years would have over- tures.” sold out to the U.S.-based Baldwin whelmed any but the most dedicated Freymuth and Schulze both have a Piano. piano maker. The Berlin Wall unexpect- realistic assessment of the global piano Baldwin’s investment in new factories edly came down in 1989, just as market: they acknowledge that unit and machinery ensured Bechstein’s sur- Schulze was revamping Bechstein’s sales are not likely to increase. “You can vival. And, a “hands-off” approach gave Berlin manufacturing operation. The count on three fingers the countries with the Berlin management the autonomy world cheered Germany’s reunification, any growth potential,” says Freymuth. necessary to preserve its unique piano but for Schulze it meant scrambling to However, they are also confident that building tradition. However, Baldwin’s find a new production facility outside of opportunity remains for well-managed management lacked the interest or strat- Berlin. Fortunately, he was able to take companies that can deliver exceptional egy to capitalize on the Bechstein lega- control of the former East German quality, like Bechstein. Freymuth adds cy. In 1986, it tried to hire Schulze to state-owned piano plant in that with a sound and conservative man- run the company. He refused and coun- Seifhennersdorf. “We weren’t very agement style, Bechstein’s “legacy will tered with an offer to buy Bechstein. happy about having to leave Berlin on be secured for the next generation.” The deal was completed shortly there- such short notice,” he says. “But in spite www.bechstein.com after. of all the difficulties, the move proved .

Load more