Striking a final chord

[Avery Todd]

List,
   I thought maybe some of you might be interested in this.

Avery

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>Date: Wed, 11 Sep 1996 06:22:47 -0700 (PDT)
>From: Varda Ullman Novick <vunovick@netcom.com>
>Subject: Striking a final chord
>Sender: owner-piano-l@uamont.edu
>
>126-year-old San Francisco institution Sherman Clay selling its piano
>business
>
>Wendy Tanaka
>OF THE EXAMINER STAFF
>September 10, 1996
>
>
>In a weakened market for piano retailers, Sherman Clay & Co. said Monday
>it was seeking a buyer for its stores, which sell and rent pianos as
>well as offer music lessons.
>
>The 126-year-old San Francisco institution, the nation's largest piano
>retailer, plans to sell its remaining nine locations by the end of the
>first quarter next year. The locations for sale include stores in San
>Francisco, Oakland, Santa Clara, Phoenix, Houston, the Seattle area and
>Portland.
>
>However, Sherman Clay, which employs 140 workers, said it planned to
>retain its financing business, which lends money at varied interest
>rates to customers buying pianos.
>
>"We want to sell the business in its entirety as a going concern," said
>Sherman Clay Chief Executive Eric Schwartz, whose family has owned the
>piano company since 1960. "It's not a distress sale. . . . We want to
>sell it to a buyer who will maintain the standard of service and
>integrity people have come to expect from Sherman Clay."
>
>Schwartz noted that although the privately held Sherman Clay had
>consistently posted profits throughout the years and recorded revenue of
>$40 million last year, he and his family had decided to refocus their
>business strategy.
>
>"While we certainly have mixed emotions as we explore the sale of
>Sherman Clay," he said, "the family has decided that it would like to
>concentrate its time and capital on other business interests and
>investment activities."
>
>The other family businesses include a paper mill in Vermont and strip
>malls in California, Texas, Oklahoma, Washington and Oregon.
>
>Schwartz, who noted that Sherman Clay was also in the process of closing
>five locations in Southern California as well as one store each in
>Sacramento, Eugene, Ore., and Houston, said he was hoping all of the
>company's employees would find jobs with the new owner.
>
>"We're looking for someone who's going to recognize the value of our
>employees in playing a role in the success of our company," Schwartz
>said.
>
>But despite his rosy forecasts about Sherman Clay's future, nationwide
>sales of pianos have been increasingly sluggish.
>
>According to industry statistics, the number of pianos sold in the
>United States dropped from 282,000 in 1978 to 99,000 in 1994.
>Television, computer games and other technological advances, industry
>experts say, have overtaken the homespun attraction of pianos.
>
>And like other piano retailers across the country, Sherman Clay
>increasingly has been feeling the pinch. Since the late 1970s, the
>company has been selling off or closing stores. In January 1983, Sherman
>Clay had 43 stores across the country. By January 1994, the company had
>23.
>
>"Demographically, our markets have changed," Schwartz said. "To be in
>retail and to be successful, you have to move with your customers."
>
>But some industry members say weakened demand for pianos was just one of
>the factors that led Sherman Clay to sell its business.
>
>Joseph Brattesani, president of San Francisco-based Colton Piano & Organ
>and a former manager at Sherman Clay, believes the company has not been
>well run.
>
>Poor management alleged
>
>"It has unbelievably poor management," said Brattesani, who noted that
>Schwartz was often out of town. "They've lost a lot of good people."
>
>Roy Larrick, owner of Larrick Piano and Organ in Sacramento, noted that
>Sherman Clay tended to sit on its laurels and not aggressively sell
>pianos.
>
>"They're not in touch with reality," he said. "It takes aggressive sales
>and promotions to be in our business today."
>
>As a result, Brattesani said, Sherman Clay has lost a number of key
>contracts with major brands such as Steinway because the company
>couldn't sell enough pianos.
>
>Schwartz acknowledged that Sherman Clay had indeed lost its right to
>sell Steinways at its stores in the Los Angeles area and Sacramento, but
>said he believed it had not hurt his company's business. "We just
>replaced them with other brands," he said.
>
>Larrick is also skeptical about whether the buyer will keep the company
>as a piano retailer.
>
>"People aren't standing in line'
>
>"When you sell your business or change locations, piano brands can't be
>transfered automatically," he said, noting that the new buyer would have
>to obtain new contracts with piano manufacturers. "And in our industry,
>people aren't standing in line to buy piano stores."
>
>Schwartz downplayed the naysayers. "Their skepticism is not warranted,"
>he said. "We feel confident these are great piano store locations."
>
>Sherman Clay was founded in San Francisco in 1870 by Leander Sherman and
>Major C.C. Clay. Bernard Schwartz, Eric's father, bought the company in
>1960 and turned it into a national chain. The landmark Sherman Clay
>building on Kearny Street was constructed just after the 1906
>earthquake. That store moved to Mission Street two years ago.