More importantly, Grands are carrying the industry. However now these pianos are getting old and are being retired. It was the manufacturers of new pianos who struggled. Dealers did fine, because they bought and sold them. Over the next ten years the same pieces were sold at half price and took away from the new piano market. People just wanted more affordable and smaller pieces. In the 70РІР‚в„ўs as well as the 80РІР‚в„ўs there was a big movement towards smaller uprights and away from Grands. To figure out the big rise, we have to go back 30 years. There was a big drop in the late 70РІР‚в„ўs and 80РІР‚в„ўs but the market has finally turned for the better. The total number of people starting to play a piano is on the rise (tracked by sales of new beginning piano lessons books). Hits like Shine, The Legend of 1900, etc have also helped the cause. In fact there is now a renewed interest in this field because of studies linking intellectual development of children and piano playing. Although the percentage of people playing the piano is much lower, the population is also higher so the overall numbers havenРІР‚в„ўt changed by much. The heyday for this industry was the 1920РІР‚в„ўs and it will never be like the 20РІР‚в„ўs again. The next question was РІР‚СљIs there a future?РІР‚Сњ The case Oliginos presented was simply this. Hence there was someone out there making money in this industry. A firm with growing revenues, with a positive gross margin and operating margin. Is there a future in the Piano market? And is there anyone who is making money in this market? Baldwin could only be saved if the answer to these two questions was yes. To us it boiled down to two simple questions. In the interest of being objective and against our better judgment we went looking for any straws that would help us save Baldwin Piano. It was just a question of how long the process would take, not when, not if. Break and sell out the family silver to anyone interested in assets that Baldwin carried on its books. Line ItemР”Р„t the end of our first meeting there was complete consensus in our group to recommend a quick and painless death for Baldwin.

The arrival of GE Capital high yield unit on the scene was the ultimate sign that Baldwin was deeply in trouble. When we first looked at BaldwinРІР‚в„ўs numbers and its historical performance, we saw a dying industry, a shrinking market, cheaper imports, bad investment bets, distracted management, increased leverage and interest expense, bankers bailing out and a firm bleeding cash from every orifice with no relief in sight. On the 300 th anniversary of the modern Piano, Baldwin Piano is struggling to survive.

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