Guys, where have we been on this Bain acquisition of D&M?

[Mr Peabody]

I heard today for the first time from some guys back from CEDIA that Bain definitely bought D&M. This is from a Marantz dealer who is highly pissed about Bain going to distributorship with Marantz where it can be sold to anyone with a contracting license. Or, should I say possibly former Marantz dealer. I was shocked, I thought something of this magnitude would be all over the internet but I haven't seen anything. I know there's mixed views here on where gear should be sold but muddying up marketing is bad, take a look at TEAC for best, worst case scenario. I hate to see it just as Marantz has started making themselves known as a high quality product again. Bain also owns Burger King and Duncan Donuts. Care for a donut with that amp? You really have to wonder what will come of McIntosh. All of this may come to mean nothing, but you hate to see a company with a heritage like Mac end up where it is.

It was hard finding anything of concrete, you all may have better luck. It is a done deal though.

This is a pre ink article: http://www.twice.com/article/CA6571801.html

Wow, these comments are very interesting. Bain's found Mitt Romney? And you think our country isn't being ran by corporate America? Best Buy selling musical instruments? At least Bain is U.S., wouldn't be nice if we actually manufactured stuff in the U.S. again?

http://www.audiocircle.com/circles/index.php?topic=58439.msg518409;topicseen

I did find a couple more links but they wouldn't work. So you guys take over.

[elapsed]

Well this certainly slipped under the radar.. frightening that Bain Capital controls $78 Billion worth of investments. There are a few more articles found on news.google.com. I guess at the end of the day, almost everything comes down to cold hard dollars. Fortunately many of us support small audio companies that have somehow managed to remain independant and create significant products with life and soul.. Rega, Linn, Naim are the first of many that come to mind.

But somehow I don't think that Bain would reduce the quality and tarnish brand names such as McIntosh, Marantz and Denon, that would defeat the purpose of such a signficiant investment, or at least I would hope the products continue to be high quality.

cheers,
elapsed

[mbbuchanan]

This could be good or very bad. Good if we can get Marantz quality products for a lower price, and bad if we get lower priced Marantz @ crappy quality. I suppose we can just let them know with our pocket books. I just hope that maybe taking traditional Hi-Fi companies and making them more main stream and affordable will make the I-Pod generation see the merits and, I say , necessity of quality sound reproduction.

[pixelthis]

ITS all going to change.
Bail Bondsmen in my town are talking about how business is down because criminal can't get the scratch for a bail.
A signs are pointing towards a major depression, the only reason anybody would want to be prez in this climate is to be the next Roosevelt.
Its good that a "name" like Marantz is under the shelter of huge bucks,
but there is going to be a consolidation like you have never seen, and some will fall by the wayside.
YOU THINK Japan inc used to have great products , you shoulda seen them before the last crash, which almost destroyed them.
And this one will make that one look quaint. :1:

[frenchmon]

http://www.audioholics.com/news/industry-news/denon-up-for-sale-best-buy-and-kenwood-bidding



http://www.cepro.com/article/bain_capital_says_kenwood_not_involved_in_dm_bid/#When:16:13:02Z

[nightflier]

This is a bit off topic, but I was just up in the wine country last week and asked around why the better wines weren't making it to the store shelves anymore. Certainly, the dwindling wine inventories at Trader Joe's and even such larger outfits like Beverages and More (BevMo for the regulars) would indicate a severe cut-back in production. To my surprise, the wine-makers are actually doing more business than ever. So where is all this wine going? The answer lies in something that is happening across many industries: they are no longer selling to large resellers because the prices these charge is too high. Instead, they prefer to sell directly, mostly through their wine clubs. All it takes is a website and a mailing list sign-up form. Some wineries are selling all their wine that way.

The side effect of this is that what you will find in the stores is mass-produced mid-priced wines from the big names (Gallo, Berringer, Charles Shaw, Woodbridge, Mondavi, etc.). As might be expected, these wines taste average with a palate that is also middle-of-the-road: nothing too spicy, bold, or exotic. I guess you can call it the iPodization of wine, since it smacks of the average quality of compressed music where frequency extremes are trimmed away and the mids are emphasized so that they sound better on low-quality ear bud phones and through lots of ambient noise.

What I'm getting at is that all our products are becoming iPodized. With Marantz, a company that has gone up and down with each acquisition, the company has no relationship anymore to the great tuners and amps that the name once stood for or the designers that built them. Sure there are still some redeeming qualities at the pricing extremes in respective market segments (i.e. their higher-end CD players). But the question remains whether the thin-margins of income from the mass-produced stuff is enough to support the engineers who design the higher-end gear before they move on to other companies.

So if you want real quality and service, buy directly from the original designers. Join the many happy customers who are finding the products and services they need from joining the "buy local" mantra. In our hobby there are enough choices from small mom & pop shops to find just about every component you need to put together a decent, if not excellent system. The only exception that I've found is with TVs, BR players, and to a lesser extent turntables, but everything else seems to be available.

What's next: Marantz CD players @ Wallmart?

No thank you.

[Mr Peabody]

Darn, you mean I have to join a club in order to buy my Mogen David now?! The pain one has to endure when you are blessed with good taste.

[pixelthis]

WESTINGHOUSE liscensed their name to a maker of cheap LCD tv sets awhile back, and this is the future of most brands
Marantz CD players at walfart? A LOT MORE POSSIBLE
than you think.
When I BOUGHT MY VIZIO Sony was right there beside them.
And have you seen the curtis mathis tv's? This used to be the
"upscale" Panasonic brand, and Proscan is selling at Sears for a good price.
As a matter of fact, if I didnt have to wait four days I would have gone with that one, probably:1:

[Mr Peabody]

Sony entry level has been in Wal-Mart for years. Interesting that some one drudged up the Curtis Mathis brand. They had a good thing going and nice stuff in the day. I think it was WM that killed them.

[kexodusc]

Marantz has a history of being "off" and "on", and in the last decade or so has had its share of ownership changes. I'm not so sure this is the end of the world by itself. There's a good chance Marantz could have great success or terrible failures either way.
I see one of two scenarios unfolding if they go the Wal-Mart route:

1) Worst-case: Marantz builds cheapo a/v receivers and entry level gear, some of it has questionable quality. What's the fallout here? Chances are the Wal-Mart shopper isn't expecting the Wal-Marantz to be as good as a $2000 Marantz piece - and odds are Wal-Marantz beats any current Wal-Brands in the audio section. So by comparison, the crappy Marantz is still probably as good or better to those customers than anything they were considering. The only damage to reputation might come from smart-audiophiles who are savvy enough to avoid the Wal-Marantz models anyway. Doesn't mean their hi-end stuff goes to hell.
The only real potential for disaster here is if elitist audiosnobs snub Marantz for the sole reason that it is found in Best Buy and Wal-Mart. I'm sure the mass-market expansion will offset the loss of audiosnobs.

2) Best Case: Marantz goes into Wal-Mart and the likes, but their product is a typical quality Marantz, only sold a bit cheaper. Trickle-down effect. Wal-Mart shoppers get into audio and home theater. Marantz earns a bit more money and stays healthy, the upper echelon product lines can continue because the corporation is healthy. Even more, some of the Wal-Mart buyers are going stay brand loyal, and likely graduate to better, higher end Marantz gear.

Not a bad thing IMO.

Any notion of the new ownership group buying this company, only to walk in and say we want you to do everything different is unlikely (though not unheard of). They didn't buy this company because they didn't like how it ran. They might have ideas for expansion.

Also, I know Bain quite well. They're not in the business of running companies. They're in the business of helping companies expand or recover, buying low, selling high. You can rest assured they did a thorough fundamental and competitive analysis on D&M and liked what they saw - particularly managment's plans. They'll make capital available if needed. If Marantz has ideas of going mass market, it's not because Bain is telling them to do so...they were going to do it anyway.

[bobsticks]

I agree with Kex 100%,and because of this the rest of you are wrong:D

Seriously though, I could swear that a few years ago I saw a Pioneer HTIB in WallyWorld. This would have been around the same time they were revitalizing their image within the Hi-Fi community. If a company can successfully market a lower or entry line to a major retailer wouldn't one assume that the additional revenue could/would/might be put back into R&D? Seems to have worked for Pioneer in terms of both real-world quality and public perception.

I also agree with the point about getting customers from the point of entry, especially folks on the cusp. Who here isn't more likely to move up the line of a manufacturer with whom they have had good experiences?

I find it funny---"ironic" funny, not funny "haha"--that down yonder in the Off Topic threads I get ye ol' facsist treatment but when somebody mentions the "W' word in relation to amps or receivers or speakers y'all get all white glove.

[Feanor]

...
I find it funny---"ironic" funny, not funny "haha"--that down yonder in the Off Topic threads I get ye ol' facsist treatment but when somebody mentions the "W' word in relation to amps or receivers or speakers y'all get all white glove.

Two different realms, BS. :)

There are cheaper Marantz lines for sale at (say) Best Buy but it hasn't seemed to hurt the rep of high-end Marantz models. Marantz and Wal-Mart wouldn't necesarily be the end of the world.

Say: wasn't there a Martin Logan model for sale at Costco for a time? It didn't doom ML to oblivion though it raised a few eyebrows at the time, (not the least from MF dealers).

[nightflier]

I also agree with the point about getting customers from the point of entry, especially folks on the cusp. Who here isn't more likely to move up the line of a manufacturer with whom they have had good experiences?

In theory yes, but in practice that hasn't happened. My guess is that when you get Joe Sixpack-Walmart shopper to buy a Marantz receiver, the rest of his gear is not up to snuff, or at least not enough for him to hear the difference. So he shrugs the highfalutin name off as hype and goes about his business.

One perfect example of this is how so many people don't understand the big deal about why iTunes compressed music isn't audiophile quality - after all it sounds fine on their iPods, no? I know a guy who sold off over a decade's worth of a CD collection because he had ripped them all to MP3s. What's the compression ratio he used? 128kps because he couldn't hear enough of a difference above that (although he agreed that 64kps was a bit distorted).

This is not the guy who's going to be impressed with the better sound of that Marantz receiver.

[bobsticks]

In theory yes, but in practice that hasn't happened. My guess is that when you get Joe Sixpack-Walmart shopper to buy a Marantz receiver, the rest of his gear is not up to snuff, or at least not enough for him to hear the difference. So he shrugs the highfalutin name off as hype and goes about his business.

One perfect example of this is how so many people don't understand the big deal about why iTunes compressed music isn't audiophile quality - after all it sounds fine on their iPods, no? I know a guy who sold off over a decade's worth of a CD collection because he had ripped them all to MP3s. What's the compression ratio he used? 128kps because he couldn't hear enough of a difference above that (although he agreed that 64kps was a bit distorted).

This is not the guy who's going to be impressed with the better sound of that Marantz receiver.

How do you know it hasn't happened? I mean, seriously, what are there a couple hundered thousand people a day wandering through Wal-Marts?

I agree with your point about iPod guy not being the target market but that's the point, he isn't the target market. The WallyWorld down in my parts, or "Hood-Mart" as I call it, is way different from the one ten miles north in "Fishers". One has a parking lot full of hoopties and a bus stop out in front and one has a parking lot full of Bimmers and SUVs. You can't tell me these stores have the same demographics...and the same can be said for the Targets and certainly the Meijers in town.

My point isn't to pick a fight. It's that Feanor's right in that Martin Logan has a line in Costco's and it ain't hurt them. I just think that at this, a fairly precarious and competitive time in the economics of home entertainment, any exposure is good.

[nightflier]

My point isn't to pick a fight. It's that Feanor's right in that Martin Logan has a line in Costco's and it ain't hurt them. I just think that at this, a fairly precarious and competitive time in the economics of home entertainment, any exposure is good.

Not trying to disagree, just offering a different possible outcome. The Bimmer-SUV crowd, despite having the dough, may still not hear the difference. Maybe the MLs at Costco didn't hurt them, but did it help them? Let's not forget how piping mad the ML dealers where over this. Perhaps they were mad enough to drop ML from their stores, or at the very least put these speakers in the smelly back room and move the Magnepans to the front of the store instead. Who knows.

[Mr Peabody]

ML at Costco, and they have a select few models on Amazon, I can see it both ways, what a great way to get your name out there for those who don't think "boutique" when shopping audio, on the other hand neither outlet has any way to show the product or assist with it. Hopefully, ML provides a good manual and customer support. Pioneer and Sony have always been in Wal-mart. Pioneer's car audio especially, the home has been hit and miss. But would Marantz or anyone else want to follow that pattern. It doesn't seem to hurt the companies who are in WM but it seems no matter how good the audio product might become it just don't get the same respect. As an example when I worked for an audio store we were big Kenwood dealers, I bought a top of the line, one of a kind high end integrated amp. When ever I started going into high end shops looking for my next upgrade and they ask, "what do you have now?", and I said, Kenwood, and went into the long explanation of how it was a special amp built by Kenwood to show they could yatta yatta, it was a waste of my breath. I should have let them think what they wanted and moved on. I think Marantz could do the same thing if that was their design. Maybe put entry in WM and keep all the boutique stuff under the Reference name. It's all speculation though.

Here's a question for you, let's say Marantz stays as good as it is now or even better, they move their manufacturing to the U.S. but of course manufacturing cost goes up, would you be willing to pay more for a U.S. built product? For example, the 5001 instead of $299.00 runs $450.00.

[bobsticks]

A couple thoughts gentlemen:

1) I certainly didn't mean to imply that the Bimmer crowd could necessarily hear a difference. My only point was that too often when we talk about mass retailers we treat them as a single demographic. Lotsa different folks going into these places and if I owned a business with multiple tiers of products I would have no problem exposing that lowest tier to the greatest amount of people possible.

2) Yo Peabody, I'm guessing that it's been a hot minute since you worked audio. The only relevance in this is that the internet makes it a different world. A company can literally craft a message informing people that it has multiple lines the best being sold at only the most exclusive stores. They do this in clothing all the time. Notice how Ralph Lauren has Chaps and his eponymous label? It's called branding and erebody knows that Sony makes Aiwa.

3) This fictional company that I own, yeah, we're doing longterm planning. In a country with a 58% divorce rate there's a lotta kids that are never gonna get that first exposure from dad or gramps. Most likely they're gonna start off in lower and middle income homes which is exactly the demographic that shops these places be they white, black, brown, yellow, or desert taupe. I think with a carefully crafted message companies can retain their existing consumers while attracting a new group. Some of y'all ain't gonna be around for another round of upgrades.

4) More money for an American product? Maybe. Is the product at least as good as competitors? I'm not gonna spend more cash just to get an American product if it's substandard.


---sticks

[nightflier]

More money for an American product? Maybe. Is the product at least as good as competitors? I'm not gonna spend more cash just to get an American product if it's substandard.

Actually, I think most American manufacturers are claiming (and that's a matter of opinion too, I know), that they offer better value than the imports. In many cases they are actually bargains and the products often outperform much higher-priced imports.

Two examples I can give from personal experience is Odyssey Audio and Spectron. With Odyssey, they make components that at least in my experience provide excellent value and compare to units costing quite a bit more. Klaus has been extremely helpful (and forgiving) in helping me find a product that meets my expectations. Now with Spectron I've been butting heads for a while, but to be fair, I acquired my amp from someone who may have tampered with it. That said, I've sent it back three times and they have been excellent about servicing it each time. I even had the chance to talk at length about speakers and amp-matching with John Ulrich, the last time I came by to drop it off.

And that brings me to another reason why buying American can be a great bargain: service. I just don't think one would get that kind of personalized service from Marantz, which detracts from its overall value, IMO. That's why the cost argument is one that I have some trouble with.

[Woochifer]

Why's everybody so focused just on Marantz? Marantz hasn't been an independent company since Japanese conglomerate Superscope purchased the company from Saul Marantz in the 1960s. And before D&M Holdings was formed in 2002, Marantz was nothing more than the high end badge for Philips.

Bain Capital acquiring D&M would basically be the fulfillment of D&M's business plan -- group together some consumer electronics companies, build up the equity value of the holdings and sell out. Like it or not, D&M was not formed by audio enthusiasts, it was a group of investment bankers who created D&M by acquiring Marantz from Philips and Denon from Nippon Columbia.

Gradually, they added McIntosh, Snell, and Boston Acoustics, and built a jointly operated manufacturing operation in Japan. Now, they've managed to push Harman International out of Circuit City stores, while continuing to maintain a big presence with Best Buy/Magnolia. From what I've seen, D&M was never intended to last very long, since it was all money men at the top. This isn't like Harman International, where founder Sidney Harman remains the Chairman of the company.