To all the naysayers in this thread ... take it from me, the employees at ARC are totally dedicated people. The new "owner" is leaving them alone to continue producing that great ARC gear. The attitude of the new owner is (In an Italian accent): "Hey, you guys know what you're doing, so just keep doing it." Sales are going really well, new equipment is on the horizon, and the service will remain great too. Personally, I think we can all continue to enjoy ARC gear for a very long time.
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My wife, who is an executive at a major bank, very quickly pointed out the sale to an investment firm is not necessarily a bad thing. Berkshire Hathaway (Warren Buffet) is a good example of investment firm that very, very carefully chooses good companies to invest in and keeps the team in place that made the company worth buying in the first place. Sure, we can all try to look into the crystal ball and predict, but I don't think I'd be afraid to buy ARC just because of this. |
Very sad indeed. Look what happened to Aragon when Klipsch bought them out. Same deal when Saul sold Marantz and Fisher sold out to Sanyo. Anyway I'm not suggesting that Klipsch is a bad company but buy-outs in audio don't usually result in better new products for the consumer especially since their original designers are not included in the sale. One exception comes to mind where McCormack audio was bought out by Conrad Johnson and CJ kept on Steve McCormack as the principle designer of McCormack audio products, a very excellent marriage of two well respected companies and the results speak for themselves! |
let's see if the new company can retain and/or attract qualified designer/technicians who can sustain product quality.
all of the comments so far are conjectural. within some reasonable period of time, the viability of the company will be apparent. give the new company a chance to show its true colors. |
I can say one thing from my job perspective.
I have worked at the job I am at now for 18 years.
When I started here, the company was headed up and run by 2 brothers and they traveled from state to state and country to country to keep there FAMILY buisness thriving.
They took risks and invested in People, the bottom line was impoertant< but the people who worked for them were just as important, over the last 7 yearsmy place of imployment has changed, 7 years ago the brothers retired, they gave the reins to the Family, and in turn the family brought in people who's only interest was $$$$$$.
Our quality has gone down as has the pride and worth of the Associates. so from what I have sen the PASSION of the brother sis GONE, and the only thing now is the $$$$$$. |
I guess the one yardstick that should be used here to measure the future of ARC is: What has happened at Sonus Faber since they were bought out. Are they now produced in China? I really don't think that the new owners won't try to fix what isn't broken. Remember years ago what happen with Nakamichi? Where is that name plate now? I doubt that investors would risk a few short years of spurt sales hanging on the reputation of a brand like ARC or Sonus Faber. As mentioned McIntosh has actually improved with the influx of money for R&D. They have a broader product catalog than ever before, and still mostly build or finished in Binghamton NY. Hey maybe we will see a ARC Turntable again? I have plans to buy ARC preamp later this years and this doesn't change my plans. I think that they will be around for the forseeable future and continue to held on a High End platform in the audiophile world.
All just one man's opinion of course. |
Who knows if they will still be producing the same quality components? From what I have read, William Z. Johnson was not sitting in an armchair directing the company. He was still designing many of those great reference pieces. |
Return On Investment is the driving force behind many problems in our economy. We have decided as a people that money is the most important thing in the world and the product or service is just a way to get some. Quality of product and service is just a B.S. slogan for far too many companies.
I just retired from Allstate Insurance after 30 years. When they went public 12 years ago they were number 6 in the top 12 insurance companies as regards measured customer service. Today they are number 11 - one more point drop and Allstate is the worst customer service provider in the business. But their profits have been huge and the stock is doing great, thank you. The company has substantially reduced staffing in all departments (especially claims) and profits have risen accordingly. Even though that company provides one of the worst products in the business, they are only concerned about short term profits and are continuing to gut the company to provide them.
I've always gotten a different impression from high end audio companies. I once was told by Nelson Pass (by phone) that he didn't think I, as a tube guy, would be happy with one of his amps. He sounded genuine and this is what makes me wants to actually buy a product from him. I had a similar experience with a high end speaker company. The company rep told me their speakers tend toward the lean and detail end of the spectrum. Advised me not to buy if I liked what he called "The middle body of the note". This is a company who builds products the old fashioned way - to their vision and the best way they know how and someone I'd like to do business with.
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Audio Research will not be hurt by this transaction ... if anything, it will be bettered by the input of more financial capital. All the personnel will remain and Terry Dorn, who has been the number two man behind Bill Johnson for several years, is now the president. Bill Johnson is "honorary chairman of the board." And, as he has always done, he will still be active in designing and refining ARC products. Even though he is 80 years of age, he is still in good health and still has those golden ears. He still spends part of the year in Minnesota and goes into the office regularly, and the other part of the year he works out of his home office in California. The quality of the ARC product will still be in the tradition of what William Zane Johnson has established over the past 30 odd years. He would never have allowed his company to be bought out if the quality of the product or his personnel were going to suffer. You can bet on that. I have enjoyed so many of the ARC products over the years, and I know I will continue to enjoy the music that ARC makes possible. I have on order now an LS26 preamp and the new VS115 power amp ... I can hardly wait to drive my Merlin VSM-MXe's with those glowing tubes! |
"Expected returns that are unattainable is where desperation and brand killing begins". So true. |
I would expect more HT from the new ARC now. While I do note the case studies of past buyouts I doubt things will be as doom and gloom as many have posted. Either way it will be fun to watch. |
I don't think SGR is unintelligent. They have analyzed profits and probably have a reasonable expectation of Return On Investment, not an unreasonable one. That being said, expected ROI nowadays is 38-40%. In my particular industry that's insane, when we express that 25% is about all that's possible, they say "O.k.,we understand- we want 38-40%".
That seems to be pretty universal now.
The upside is that if they can attain those types of numbers, all will be well. Buying ARC gear instead of shying away will insure that nothing changes. With ARC's excellent level of customer support, they could take a hit in that department and still be very good, so I wouldn't lose much sleep over it.
Hopefully, they will keep manufacturing in Minnesota, seeing it change to China production would be the first thing to make me NOT consider buying ARC. I pays the bills and takes the lumps in the High End because it helps support products made in the US and other reasonable economies, if I wanted mass produced mass market garbage I would have a different hobby.
RFG |
Tomryan, your so right wallstreet and all foreign exchanges drive business today. And most of the major companies are run by younger ladies and gentlemen and in many cases they have never experienced tough economic times like we are going through today. Expected returns that are unattainable is where desperation and brand killing begins. |
Pops,
That's the corporate World, not just America. In my part of the country German and Australian companies have come in, bought businesses, bled them, shut them down, and then walked away. In one case (Australian) more than 1,600 people lost their jobs. |
02-05-08: Chadnliz
Well I hope they dont cheapen up quality and performance, guess its a good thing my dad bought his Ref3 last month.
I bought my Ref 3 in March 2007, but my concern is service (though knock wood, I haven't needed any yet). I've heard too many horror stories from Aragon and Mark Levinson owners after their companies sold out. It is comforting knowing, worst case scenerio, that Steve Huntley will be there for ARC owners though.... Cheers, John |
In this case corporate Italy. The Quadrivio SGR, the investment group appears to understand hi-end companies, so maybe it will work out fine. |
Time will tell but you can bet on 1 thing changes are coming. Not necessarily bad changes, in fact could be very positive. But unless the new owners understand the business and also have the right people in place and empower them, they will bleed the company. That's corporate America. |
In a perfect world Output's outlook might fly.Investment Co.'s arent into upgrading products.There into upgrading bottom lines.Those concepts are at distinct odds.Lets all name an audio company thats turning out a better product after a takeover by beaners.Be specific men,talk is cheap right now.... |
Well I hope they dont cheapen up quality and performance, guess its a good thing my dad bought his Ref3 last month. |
Tiger,you are way off base. Jaybo, you and Weiserb are right on target. I have been an audiophile for 50 years. Have spent far too much money over the years. I left McIntosh in the early 60's. Tried just about all the top amps (Audio Research, Spectral, NRG, Krell, Levinson, Marantz). I probably have forgotten a couple. About 12 or 14 months ago I purchased a McIntosh MC-402 and I have never been happier with any amp than I am with the Mac 402. The most satisfying and musical amp that IMHO I have heard. Associated equipment: H-Cat PR7 preamp, Duntech Sovereign speakers, VPI Aries Extended TT with 12.6 arm, running CD's from computer hardrive through a Bel Canto DAC 3. In all the years that I been in this wonderful hobby, I have the most musical, realistic and satifying sound that I ever experienced. It's a great feeling to be a satisfied audiophile. For once, even my dear wife of 54 years agrees. That's truly Nirvana. Enjoy the music. |
Output555 is right on the money........cash infusion for R&D might give us better and most likely more affordable products in the future. |
One can look at these change of ownerships different ways. An investment firm buying a private company doesn't necessarily mean the end of what made that company great. Smart management will see the value of preserving the core principles of the company because this is what their reputation (brand) is built on. Often new ownership means cash infusion for R&D, modernization, quality control--and new energy. Companies can get complacent, lazy, smug, or simply lose their way. With sharp new management, a company be revitalized, build upon old successes and go in new directions. High-end audio is a precious, niche market generating comparatively small profits. No investment firm is going to buy a company like ARC with expectations of selling product into Best Buy and Circuit City. More likely, they'll help the company expand its product line and distribution channels a bit, and operate more efficiently. So how is that bad? |
All the key ppl are staying with the company. Mr. Johnson was not a chef designer anymore anyway - he moved to sunny California several years ago. |
The end of yet, another era. I have owned ARC gear for 25 years and i will not part with what i have. Thank goodness GNS and Steve Huntley is around to mod the old stuff and make them sound AWESOME.
Unfortunately, Bill Johnson is 80 something and this business had become too big for a one man show and he has no kids of his own who could carry the torch. Will see what the future holds.......... |
ARC is one of the best run companies and I hope they maintain the level of customer service. The reality is while we love two channel audio they might not be able to survive into the future without some synergy with home theater and high end loudspeakers and the added worldwide distribution into the very profitable overseas markets could be great for them. Our gear is a bargin with the tanking dollar.
Mr. Tiger,
In my opinion Mac has never been better, after all these years I went out and bought some. I am very pleased and you won't be seeing any of my Mac gear for sale on Audiogon, any time soon. |
Whats wrong with McIntosh, since they were taken over the people involved are the same. Yes some have retired. I think the components they make sound way better than the past and the cabinets the components are in look better and are made better. |
they lasted longer than most...mac still rules, but they are still made in ny. |
For me at least, the high end is about passion and vision by a designer with a mission, or a small committed group (cottage industry? even the "big" ones are pretty small). No matter what they say, I doubt ARC will ever be the same again (for good or bad). I know I won't feel the same about them; which does not mean they won't be terribly successful. |
It doesn't sound like a good thing to me. I agree that when big suits are watching the bottom line, sonics and service tend to be the first cuts.
Mondial selling the Aragon line to Klipsch, Classe selling to B&W, and Madrigal selling the Mark Levinson line to Harmon International are prime examples.
As with all things in life though, when one door closes, another door opens. Who knows, maybe this will help some of the new smaller manufacturers like Dodd, Audio Horizons, Doshi, and others.
It will be interesting to see what effect this has on the Audio Research products on the used market.
Cheers,
John |
Good or bad for whom? Good for William Z. and the company principals. Not necessarily bad for audiophiles who love ARC products. See what the future holds :) |
The report I saw on the Stereophile web site said all the right things to make the audiophile world feel warm and cozy about this. Only time will tell if they maintain the status quo. I think the experience with Sonus Faber is encouraging so I wouldn't worry about it ... yet. |
I think the owner was getting on in age, so it was pretty well inevitable. |
bad, bad, and really bad. The brand will always be there, the quality, engineering and passion will not. If you doubt this, just look what happened to McIntosh. Sad. Quadrivio is deep into China, and you know where that leads. Not announced, but already happening is the appointment of a finance guy who will be resident on site at ARC home base. Let the counting begin. |
