Steinway & Sons – Grand Success



Steinway & Sons has been building pianos for over 160 years. Vice president, Europe, Manfred Sitz reveals the secret of the brand’s success: Going with the times while building on traditional foundations.

Manfred Sitz likes to start the day by listening to Ludwig van Beethoven’s Piano Sonata No. 17 in D minor. “It sets the right tone for the day,” the managing director of piano manufacturer Steinway & Sons Europe says. Although his own abilities on the piano can’t compare, the instrument nevertheless takes an important place in his life. Originally trained in industrial merchandising, Sitz started working for the company in Hamburg back in 1981, first as an assistant controller, then moving on to the finance department. In 1992, he was promoted to managing the European division of the company. Since then a lot has transpired. “Especially these last years, with the European and US markets experiencing a decline in demand. Many traditional piano makers have been sold to investors or corporations. The Seiler pianoforte manufacturer from Kitzingen was bought up by a Korean company and the French brand Pleyel ceased manufacturing altogether.”

The closing financial year 2015 will show that 30 percent of the pianos we manufactured were delivered to China.

In Hamburg, however, the sales figures have increased since the economic crisis of 2008. Mainly, because the Asian customer base has been growing steadily. Steinway & Sons has had a subsidiary in Tokyo since 1997 and, in 2003, a first showroom was opened in China, in Shanghai. Manfred Sitz tells us: “The closing financial year 2015 will show that 30 percent of the pianos we manufactured were delivered to China.” The largest order came from the Far East as well: 54 grand pianos for a new conservatory in Hangshou, China. An order of this magnitude is a huge challenge. The construction of a Steinway takes up to three years, so we resorted to collecting the grand pianos from our various subsidiaries over a period of four to five months.”

Taking the time it takes is an essential part of craftsmanship.

People who decide to buy a Steinway usually make their choice in the selection room of the Hanseatic manufactory. Here, up to 40 pianos stand ready to be tested by the customer – for as long as it takes to find their new instrument. As a consequence, appointments are few and far between. Currently the waiting period is two to three months. A second showroom is urgently required – and being planned.

Eighty percent of the manufacturing is done purely by hand. Machines are only employed in situations where they ease the actual physical load for the employee.

Before a grand piano enters the selection room, numerous expert hands have already been involved in its creation. Annually, a total of 3,400 instruments are manufactured at the Hamburg and New York production locations. “Roughly 12,000 individual parts are joined together, most of them handmade by us,” Sitz explains. Just the drying of the wood, which originates from Africa, Alaska, Canada, and native German forests, takes up almost two thirds of the time. “The wood is stored in our drying halls for up to two years. Only a slow drying process can ensure that no cracks will appear later.” And even after 24 months of drying, there is no guarantee that the quality will meet the stringent requirements. Ultimately, only 30 percent of the entire material is actually used to build pianos.

Eighty percent of the manufacturing is done purely by hand. Machines are only employed in situations where they ease the actual physical load for the employee – for example, in the “hammering” room. In this soundproofed room, a cylindrical roller hammers every single key for an entire hour in order to check if the key’s timbre remains unchanged, even after having been hit the umpteenth time.

For the most part, however, an instrument is handmade – tuned and perfected by the 320 employees in Hamburg. The final touches to the woodwork are measured by eye, the felt hammers are carefully pierced until the expert’s ear hears the desired tone, and even the filigreed logo is painted by hand.

An angel enters

As it often happens, the Steinway story began in a back room. Before officially establishing Steinway & Sons, Heinrich Steinweg, then a resident of Hamburg had already manufactured almost 500 pianos. The Hanseatic officials had issued him with a permit to repair pianos, but wouldn’t allow him to construct pianos. And so he set up clandestine operations in a back room. Using his earnings, he decided to emigrate with his family to the United States, where he opened his first manufacturing site in New York in 1853. The factory in Hamburg was not founded until a much later date.

And thanks to a generous New York citizen, Steinway & Sons still exists today. Buckling under the increasing pressure of Asian competition, the Steinweg family sold the brand to US media group CBS in 1972. In 2013, hedge fund manager John Paulsen took over Steinway. The New York billionaire put 512 million dollars on the table to buy the company. Steinway fans and the music branch voiced their worries, but the people in Hamburg were relieved. The other contenders had been private equity investors who had all closely analyzed the future expectations of the business and left no doubts about their intentions. “They wanted to polish us up and sell us a few years later for profit,” Manfred Sitz recalls with a shudder. “That would certainly have been the end of Steinway & Sons, at least at its traditional Hamburg location.”

Today, we can once again concentrate on what we like to do most: building pianos.

For three years now, money has been invested continuously to improve the brand. Insofar as that is still possible. Following Paulsen’s takeover, 30 new employees were hired and the manufacturing conditions improved. Manufacturing means making by hand and hands can be sorely taxed by the sheer bulk of a musical instrument such as the Steinway grand piano, which weighs between 252 and 480 kilos. “For us, the purchase was a stroke of luck,” Manfred Sitz readily admits. “He doesn’t involve himself in the day-to-day business, doesn’t expect a clearly defined return, and is prepared to make further investments.” The change in ownership also means the company was withdrawn from the stock markets and no longer has to present quarterly figures for the shareholders. Or, as Manfred Sitz, puts it. “Today, we can concentrate on what we like to do most: building pianos.”

In Hamburg, they’re already planning for tomorrow.

In order to ensure that the brand doesn’t go under in the age of digital music players, Steinway & Sons is prepared to make concessions to the times. Thus, in early 2016, the first self-playing Steinway will be available on the German market and, as of mid-year, it should be available in Switzerland as well. “We are currently testing the Spirio in the US market,” Sitz reports. “Our target group is clearly situated in the higher income bracket.” A grand piano with the new technology will cost an extra 25,000 euro, but the price includes a life-long update of the required app. And each instrument can still be played manually as well. At present, the Spirio is available in two models, the B and the O grand pianos. “Integrating this technology into a concert grand doesn’t make much sense,” Sitz adds, and leans back. This day, like so many others, will draw to a close with a sense of satisfaction – and another musical high note: The Nocturnes by Frédéric Chopin.

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