What audio companies will go bankrupt?

[Boomzilla]

The economy is down, and looks to remain that way for a while. As unemployment becomes a possibility even for the high-income sector, it seems reasonable to predict that sales of new luxury goods (including high-end audio) will decline. So what companies do YOU think will declare bankruptcy?

My candidates:

Any individually-owned company or smaller high-end company - this would include the likes of Tekton, Axiom, Cardas, Convergent Audio Technology, Definitive Technology, Emotiva?, Golden Ear, Jeff Rowland, Jolida, Kimber Kable, Magico, Manley Laboratories, Nola Speakers, Nordost, PS Audio, Red Rose Music, Straight Wire, Vandersteen, and Zu.

[405x5]

Jun 11, 2020 12:39:17 GMT -5 Boomzilla said:

The economy is down, and looks to remain that way for a while. As unemployment becomes a possibility even for the high-income sector, it seems reasonable to predict that sales of new luxury goods (including high-end audio) will decline. So what companies do YOU think will declare bankruptcy?

My candidates:

Any individually-owned company or smaller high-end company - this would include the likes of Tekton, Axiom, Cardas, Convergent Audio Technology, Definitive Technology, Emotiva?, Golden Ear, Jeff Rowland, Jolida, Kimber Kable, Magico, Manley Laboratories, Nola Speakers, Nordost, PS Audio, Red Rose Music, Straight Wire, Vandersteen, and Zu.

Such an uplifting thread and prospect.
I’ve got a better idea 💡.....
NIX IT.....and stay positive about the future!

Bill

[cawgijoe]

Boom....have a glass of wine or a favorite beverage, put on some music,and think positive thoughts.

Better yet, order something new from Emotiva!

Today is a bad day for the market, but things will improve as the economy opens up.

[davidl81]

Jun 11, 2020 12:39:17 GMT -5 Boomzilla said:

The economy is down, and looks to remain that way for a while. As unemployment becomes a possibility even for the high-income sector, it seems reasonable to predict that sales of new luxury goods (including high-end audio) will decline. So what companies do YOU think will declare bankruptcy?

My candidates:

Any individually-owned company or smaller high-end company - this would include the likes of Tekton, Axiom, Cardas, Convergent Audio Technology, Definitive Technology, Emotiva?, Golden Ear, Jeff Rowland, Jolida, Kimber Kable, Magico, Manley Laboratories, Nola Speakers, Nordost, PS Audio, Red Rose Music, Straight Wire, Vandersteen, and Zu.

To be fair the largest driver of most BKs is debt load.  If a company has little debt they can run for a fairly long time with reduced income streams etc.  If they have a decent amount of debt that is tied to their EBITDA or revenue then the risk of default is much higher which would lead to a potential BK.  So without know most of these companies books it is fairly wild speculation on who will make it out okay.

[stiehl11]

IBTL

[DYohn]

Wow.

[daveczski65]

I doubt tekton,,I have been waiting 7 weeks for my speakers,,they are so busy,believe it is from them keep the sale going from before xmas.Finally got an update today..New Electrons SE shipping before tues!! Yea Finally, I think they still can lower there prices to sell more volume so that they can stay in the game.

All will be good,,its just this transition time coming out of pandemic.Things will change and there may be less jobs on the lower income side,but i think the rest will recover and some new things will come from this whole pandemic.

Boom,, like the others said,,have a good glass of whiskey..maybe a cigar too.. We will rebound just like in 2008.. Cheers!!!

[cgolf]

Axiom won't go out. They are too strong. Yes the economy will rebound but I don't think it will rebound as fast or strong as it went south. Down is usually quicker than up!!

[Boomzilla]

I can be optimistic, but also believe in being realistic. SOME companies will not make it through this. In fact, some families will not make it through this. It is sad to say but probably true. My better half (more economically conservative than me and also significantly smarter and more astute regarding economic trends) foresees severe economic turmoil on a world-wide scale for at least the next five years. In fact even governments whose debt load has become absurd are likely to be in trouble.

We happen to currently live in a State with a primary revenue stream based on oil. With the global oil glut, the State is having to contemplate major budget cuts on even the most essential services. The situation is exacerbated by a Legislature that has given generous tax cuts to all businesses in the name of "attracting new business." The result has been to drive the State's debt burden into multiple crises even before the current pandemic struck. So locally, things are bad and almost certain to become worse.

High End Audio is a prime industry that will disproportionately feel economic setbacks. Is what it is.

[garbulky]

I imagine it's the companies with the most people that would be most affected. The high end though will be just fine. Likely they will be doing more than fine as richer people on lockdown order things to try out in their "mandatory" downtime.

[Boomzilla]

Jun 11, 2020 16:34:31 GMT -5 garbulky said:

I imagine it's the companies with the most people that would be most affected. The high end though will be just fine. Likely they will be doing more than fine as richer people on lockdown order things to try out in their "mandatory" downtime.

Hoping you're right!

[audiobill]

Seems that well established, quality houses are always your best bet to be around when inevitably parts fail, etc....

The real risk is buying on the cheap.

Whoever said this is an inexpensive pastime is deluded.

[Ex_Vintage]

Jun 11, 2020 16:34:31 GMT -5 garbulky said:

I imagine it's the companies with the most people that would be most affected. The high end though will be just fine. Likely they will be doing more than fine as richer people on lockdown order things to try out in their "mandatory" downtime.

One of the issues is that many "professional" / non-service industry people have been working all along (from home). Many I know have had their salaries cut (5-15%) along with no matching 401k funds and no prospect of a yearly bonus. I know for me, it was easy to pick up a new piece of equipment with my year end bonus, as the audio thing is definitely a luxury item. Many will not be in position to do that this year.

[monkumonku]

Seems sort of pointless to speculate like that since we have no idea what any of these company's financial condition is like. Might wind up starting rumors as well.

[Boomzilla]

Any financially stable company will shrug and giggle at such speculation - as they should. For this thread, I do hope that I'm wrong. But for some companies, at least, I suspect that I'm not. As I've said before - in a previously-locked thread - time will tell.

[creimes]

I know this much, the big corporation is clamping down even harder on micro managing now, as an essential worker we did get lots of praise for a our efforts especially given the situation and being short staffed, but the top heavy(income) management and such need to make sure they still get there nice hefty bonuses and as usual it all falls on the shoulders of the working class.

[gus4emo]

Companies will do their best to stay afloat, if the owner can just shed some money into the company instead of being selfish and keeping it in his/her pocket....or maybe lay off some people and see how it goes...or just do something like discount....

[cawgijoe]

I highly doubt it will take five years to pull out of this. A vaccine is coming and most likely sooner than later. In the meantime, people are improvising. Yes, some folks have had salary cuts, but at least they are still working. Many companies with office workers have their employees working from home.
The hospitality industry’s have been hit hardest including restaurants, hotels, airlines, cruise ships, and amusement parks and resorts.

Things will get better every day.

[whitwye]

For my part, being more stuck at home in the evenings, it's been natural to improve the sound rig. I've been balancing out my karma by giving more to charities, what with a job that's been working from home for years now, and pay that's holding up. The botique gear makers' market is mostly people with comfortable cash flow margins. Some of the larger firms branding junk from China and selling to the financially stretched might be challenged. And a lot of musicians relying on live-performance for cash flow may end up in other trades. But for quality stuff to enjoy at home, high end butcher shops and the like have been doing quite well, what with restaurants being less available; shouldn't it be working the same way for sound gear?

[KeithL]

I think some of you are missing a major factor here...

Companies who rely on department and electronic store sales for their entertainment products haven't sold very much for the last few months...

And companies who rely on sales in boutique high end stores, mostly located in population centers, haven't seen many sales there either...

But, for companies who already earn most of their sales online, not nearly so much has changed...

Some people have lost their jobs, or are simply holding onto their money, because of the economy...

But, if you haven't noticed, some businesses are doing very well (I sure wish I had stock in a few teleconferencing and medical supply companies).

And a lot of people who aren't planning to go on an expensive vacation this year will be sitting at home listening to music or watching movies instead...

And, if you're going to be spending lots of time at home, you'll get more mileage from a new home theater system than you will from a new SUV.