The end of the year is often a time to look back at the significa of the preceding 365 days. Industry News generally features fast-breaking stories that preclude such a retrospective viewpoint—but in 2017, some industry stories kept reappearing. Here’s just a small sampling of the stories that Just Wouldn’t Go Away…no matter how much we wished they would.
—Sears: a gift that keeps on giving to cynics, retail fatalists, critics of capitalism, and armchair captains of industry everywhere. This is not to diminish the sad, protracted death of what was once an innovative and worthwhile company, but at this point reading news about Sears is rather like seeing the obituary of a nonagenarian celebrity from yesteryear: “he was ALIVE??”
In the latest chapters of this story that wouldn’t die, financial reporters The Motley Fool opine that widespread store closures won’t save Sears from bankruptcy; Lands’End, half-owned by Sears Holdings (who knew?) is also in trouble; a major investor has asked Sears to consider going private, saying short-selling of stock has hurt the company’s valuation (optimists, aren’t they?); the company has begun selling DieHard brand products on former mortal rival Amazon…
You get the idea. It’s not looking good for what was once the place where America went to shop.
—Well, there is one happy note amidst all this, sorta. The 650,000 square foot art deco Sears Crosstown store and distribution center, built in Memphis in 1927, has been transformed into the Crosstown Concourse, with stores, restaurants, and hipstery apartments. After nearly 25 years of emptiness, this is a good thing for the neighborhood, and for Memphis. It doesn’t help the Sears of today, though.
The other three stories we’ll mention have largely been covered only by Copper and the relentless Ted Green, whose Strata-gee newsletter is one of the few reliable sources of information of business happenings in audio.
—Thiel: Who’s on first? Are they here? Are they gone? Who knows? Why buy a company known for unique strengths if you’re going to throw all that away? That’s been the overriding question for the last several years since Thiel was purchased by a Nashville group with no experience in audio. It’s truly been sad to watch the inexorable dismantling and disappearance of the craft-and engineering-based company that Jim Thiel and Kathy Gornik built. Why bother to proclaim “Est. 1977” in your new-agey logo if that heritage is no longer part of the company, or its products?
The latest confusing chapter of the saga, as reported in Strata-gee, is that the company may have ceased operations. Or it may not have. As we’ve seen the company’s products move from original and stunning designs hand-built in Lexington, to generic Best Buy designs made offshore, to ho-hum Bluetooth speakers made who-knows-where, and through a myriad of CEOs and staff…the Thiel we cared about is long, long gone. Whether they go on or not is, sadly, moot.
—Classe’: Not out of business, says owner, B&W group. Out of business, say former employees and everyone else. Now, back from the dead? We’ve previously reported upon the conflicting reports regarding the status of Classe’, and Strata-gee‘s reports of the company’s closure, of its Montreal headquarters in October. Now it appears that the Sound United group, longtime owners of Polk Audio and Definitive Technology who had purchased D+M’s holdings of Denon, Marantz, and Boston Acoustics earlier this year, may have acquired…what, exactly? It’s unclear if there is stock remaining to sell; development of new products had apparently ceased at Classe’, quite some time ago. There is widespread industry speculation that the brand was purchased in order to lend greater credibility to Sound United’s portfolio of mostly mid-fi brands, and provide additional SKUs for the company’s dealers, and especially for Magnolia/Best Buy.
The intent and direction will remain to be seen. Meanwhile, let’s view this as good news, for a change.
—Gibson: The biggest WTF? conglomerate in music and audio continues its baffling ways, negotiating debt payments and selling off real estate. Both Copper and Strata-gee have followed the unpredictable path of Gibson Brands, whose massive debt and curious collection of companies has prompted speculation and consternation in both the music and audio industries. In just this past year the company’s credit rating dropped dramatically, a Nashville property was sold, and it was announced that the company’s huge factory near Beale Street in Memphis would be sold.
Memphis’ Commercial Appeal reports that the factory there has been sold and the transaction approved by local governmental entities, and that Gibson will lease back the facility while a new, smaller factory is built. Strata-gee reports more details of the sale, and further reports that the company managed to delay a scheduled $5M payment on debt…but that does nothing to alleviate the ticking time-bomb of debt faced by the company: more than half a billion dollars is due in payments in mid-2018.
There’s no denying that the business environment is challenging. Let’s hope for the best for everyone as we enter 2018.