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3/2/2003

Grand celebration

By Julie Claire Diop
Newsday

NEW YORK — When workers take apart older pianos in need of repair, they sometimes see chalk signatures of former Steinway & Sons staff. Though the company discourages the practice, the signatures were placed on pianos’ soundboards or on sides of keys decades ago, just as artists sign their canvases.

Bill Youse, who heads the 46-person restoration department at Steinway & Sons, remembers one worker tearfully adding his name to his uncle’s, who passed away years earlier.

Factory workers perform many of the tasks their predecessors did more than a century ago. They realize the pianos they make could be played in the best concert halls, and believe their work must live up to the Steinway name. Steinway organizes factory concerts, and employees say it’s humbling to hear the beautiful music Steinways produce.

Steinway was the piano of legends Anton Rubinstein, Vladimir Horowitz and Sergei Rachmaninoff. John Lennon composed the song “Imagine” on a Steinway, and Billy Joel continues to perform on Steinways.

On Wednesday, Steinway celebrates its 150th anniversary. “We are a company of history,” said Bruce Stevens, chief executive of Steinway & Sons, based in New York City. “This truly is a milestone, watershed event.”

Steinway has a formidable past. And its future is filled with both promise and pitfalls. The company is focused on creating a Steinway presence in China, increasing sales to large institutions, expanding sales of its new, less expensive piano lines and growing its restoration business.

It is pursuing these strategies in a weak market for luxury goods that has reduced its sales of grand pianos in the past two years. Steinway must grow in China and elsewhere without losing its luster. Already, the company has a handful of critics concerned about quality.

But on the 150th anniversary of the day it incorporated, Steinway will pause to look back.

Anniversary activities throughout the year include a celebration at the New York Stock Exchange, three concerts at Carnegie Hall in June, the unveiling of a 150th anniversary limited edition Steinway Grand and tours of Steinway’s 123-year-old factory.

Henry Steinway, who ran the company from 1957 to 1980, said at 87 years old, he’s proud to celebrate yet another Steinway anniversary. The great-grandson of founder Heinrich Engelhard Steinweg has fond memories of Steinway’s 100th. Of the current management, he said, “They seem to be guiding it just right.”

Steinway continues to work as a consultant for the company at Steinway Hall, its anchor showroom. “They drag me out for ceremonial conferences,” he said. To step into Steinway Hall is to enter the company’s prodigious past. The walls are covered with pictures of Richard Wagner, Jan Paderewski and Josef Hofmann playing Steinways.

One can just imagine Horowitz and Rachmaninoff meeting in Steinway Hall in 1928, their first time playing together. They worked on Rachmaninoff’s third violin concerto, which became one of Horowitz’s signature pieces.

Steinway Hall is a world of beautiful music, marble columns and cathedral ceilings. But more than that, the hall is a showcase to sell Steinway’s pianos. Rooms upon rooms are filled with concert grands, baby grands and uprights, from all three of Steinway’s lines. Each Steinway has a unique voice. Some are brilliant, while others have the smoother tones of a flute. Some seem too formidable to play, yet beckon even the novice to make them sing.

A few people custom-order pianos, but most find that the company has plenty of fine grands and uprights from which to choose.

Larry Fine, author of “The Piano Book: Buying & Owning a New or Used Piano,” said he loves Steinways. He praised the quality of the woods, felts and clothes Steinway uses, as well as the pianos’ superior designs.

But he said many Steinways leave the factories with flaws — from inadequate tuning to a foot pedal not attached correctly. “The quality control is very varied,” he said.

Steinway responded that dealers are the better ones to make final adjustments, based on what customers want.

Since Heinrich Engelhard Steinweg changed his name to Henry Steinway and opened Steinway & Sons in a loft in lower Manhattan in 1853, Steinway has built its brand by putting a premium on quality, and promoting its instruments through musicians and America’s and Europe’s elite.

More than 98 percent of piano soloists chose Steinways during the 2000-01 concert season, according to a company survey.

“They were and absolutely are superb pianos,” said Ara Guizelimian, a senior director at Carnegie Hall, which owns three Steinways. “They’re excellent in a wide range of repertoires.”

Guizelimian, who has worked at Carnegie Hall for five years, said he can count the number of times on one hand that artists have asked for non-Steinway pianos.

Steinway has always had connections to great musicians. In 1876, after he became president of the company, William Steinway, Henry Steinway’s sixth child, solicited letters from well-known artists, including Richard Wagner, Louis-Hector Berlioz and brothers Nicholas and Anton Rubinstein. According to Steinway folklore, he gave the pianists financial incentives to endorse the pianos, although no one knows the dollar amounts.

Daniel Miceli relates this history to people interested in buying Steinways. The director of sales at Steinway Hall said educating customers about “The Instrument of the Immortals,” and finding the right pianos for them, can take two to three months. The pictures on Steinway Hall’s walls, and the old workbench, help tell the story. And to find the right piano for each customer, salespeople do some probing. “We ask what type of music they like, what type of piano they used to play,” Miceli said. They make recommendations and encourage customers to play.

Research firm CJS Securities estimated that Steinway has 83 percent of the premium-priced grand piano market and 9 percent of the midpriced market under the Boston and Essex labels. In 1992, Steinway introduced the Boston line of pianos, which are designed by Steinway but manufactured in Japan, and cost half the price of Steinways. In 2001, it rolled out an even lower-priced Essex line made in Korea.

Grand pianos, including limited editions, range from $36,100 to $165,000. Steinway has built 29 limited-edition art-case pianos since 1998, and has sold 22 of these for a total of $3.5 million. By introducing the Boston and Essex brands, the company paves the road to owning a Steinway grand. Boston grands cost $16,400 to $37,400, and Essex grands $13,800 to $18,100.

To promote the two, Steinway guarantees their full price back if customers trade up, without any time limits. This “starts the ball rolling,” said CJS Securities President Arnold Ursaner, whose principals have owned shares in Steinway. Sales of the new brands jumped 14 percent for the quarter ending Sept. 28, 2002, from a year earlier.

Introducing lower-priced brands poses some challenges for a company associated with excellence. “That’s the brand of the immortals,” said Jack Trout, president of marketing firm Trout & Partners. “You can’t think, ‘I’m getting a Steinway for less.’”

Steinway must do what Toyota has done with Lexus cars — erect a wall between Boston and Essex pianos and Steinways, he said.

To grow, Steinway also is moving into new markets, especially China. Steinway manufactures roughly 3,500 pianos in New York, and another 1,500 in Germany. This compares to 79,000 made each year in the United States, according to Texas-based National Piano Manufacturers Association. Many more pianos are made abroad, but there are no reliable numbers. “The Chinese government is very focused on developing the country culturally,” said Julie Theriault, Steinway’s musical instruments director.

Steinway opened a distribution subsidiary in Japan in 1997, and plans another in China. Manufacturing will remain in New York and Germany, she said. Demand in Asia should offset slack sales in Europe.

Since the recession in the early 1990s, Steinway has targeted institutions such as universities, churches and temples less sensitive to market cycles. Twelve years ago this segment made up 7 percent of sales, compared to 17 percent today, Stevens said.

Steinway’s list of 30 “all-Steinway schools” includes The Juilliard School in Manhattan, Oberlin College Conservatory in Ohio and Yale School of Music in Connecticut.

Steinway also has grown by building its restoration department, from two people 15 years ago to 46 people today. The department usually must rebuild the pianos from scratch, leaving just their frames intact and covered with a new coat of varnish.

But for all the efforts under way, Steinway sells luxury items, and demand has waned for its grand pianos in the sluggish economy. Steinway’s sales dropped 6 percent to $35.5 million for the three months ending Sept. 28, 2002, compared to the same period in 2001. Shipments of Steinway pianos declined 14 percent for the third quarter, but this was partly offset by increased sales of Boston and Essex pianos.

The company’s cycles tend to lag the economy’s cycles, in part because people spend months deciding whether to purchase a Steinway. So the upward trend may still be a while in coming, said Ursaner, of CJS Securities.