I'm not sure how many of you knew that the
Steinway Musical Instruments company, maker of the famed Steinway pianos, horns (
Conn, Selmer and LeBlanc) and
Ludwig drums, was up for sale for the last 17 months. The company, like many others in the industry, had problems maintaining their margins and sales during the downturn in the economy and its shares had plunged 10% in the last year.
The good news is that after looking at the various offers to purchase the company, the board of directors decided that no offer provided any better value than carrying on as they have been. What the company probably will do is sell its
Steinway Hall building, with it's main 2000 seat auditorium, on Manhattan's 57th street.
This is another example of a company in a small industry going public, then having a difficult time playing by
Wall Street rules. The musical instrument business is contracting, and regardless how many companies you roll up (which isn't a good idea anyway in this business), it will never meet those kinds of expectations.
What investment bankers don't seem to realize is that the music business is basically one of creative entrepreneurs that play by their own rules. As a result, the business is unlike any other and doesn't fit well into the world of MBA's.
I'm personally pretty happy that the company won't be sold to another hedge fund, but I don't know that it's any better off that it was anyway.
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