The only problem with that hypothesis is that other high end audio companies don't appear to be having problems. Maybe they are but it just hasn't shown yet? Martin Logan or others haven't lowered prices yet. I think that would be a sure sign of low demand?
ARC to be liquidated ??
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Yes you may very well be right on that Robert, I’m sure there are many other factors involved beyond my simple observation for sure. Personally I don’t think ARC was in all that great of financial shape when he bought it. The fact that the company came to him trying to get him to buy it tells me there very well may not have been much interest from anywhere else to buy ARC. Who knows for sure? Certainly not me
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And the other thing I was thinking about ARC and other high end manufacturers. Is the fact that the customers that have the means to purchase the equipment at this level generally are not affected by economical trends they have the means of making the purchases. So that aspect of my observation doesn’t really apply in that case.
Sale revenue that is less than company total expense lead to loss. Loss reduces owners capital. Depending on the amount of equity owner has injected into business and size of year on year losses. Eventually owner under above scenario will no longer have claim on firm assets since after continuing losses owner equity is now zero. Capital is owners claim on Total assets.
This scenario takes place even if the company has no debt at all. Debt just speeds up the process. Other high end firms perhaps do not owe or owe little money to bank or do not have agency costs. If firm takes loan from bank then there is a need to repay principal and interest to bank. The larger the loan greater susceptibility to insolvency if primary operation sales drop. Insolvency can be fixed. However if firm not made solvent then result bankruptcy.
The need for lowering price does not arise if at existing price ML able to sell forecasted target quantity.
Lower prices is not a sure sign of low demand. When interest rates are comparatively high sales are sluggish. Production falls. Firm workers are laid off. Income earned falls. And demand falls. These are the signs of low demand.
amey01
Well-known member
Yes there are. See thread:
https://www.martinloganowners.com/threads/arc-now-mqa-entering-administration.19674/
What's more - it doesn't take problems with the economy for a company to collapse because of poor management.
Yes, true. Chances are most places that go out of buisness during times like these were already in trouble and this is just the icing on the cake. The economy is going to get worse, and we will probably see more of this.
Heyfey
Well-known member
What might be at play here is the time-shifting of audio gear purchases three years ago when the pandemic set in. What I read was that sales took off when folks realized they were going to be housebound, but I'd think many of those purchases would have been made over the next several years of normalcy. Now the opposite may be happening. I know I personally bought several lifetimes worth of headphones and amps in 2020, something that save for COVID never would have happened in such a short period.
Good point, kinda like what's happening now with electric car purchases I think. Initial rush and then everyone has what they need, a lull follows.
I also think families are tightening their budgets because of the recession. Expensive audio gear is a want and not a must have. I know I've cut way back on all of my spending. We greatly increased our savings.
(Great) Audio Research News!
June 21, 2023 Michael Lavorgnahttps://twitteringmachines.com/great-audio-research-news/
https://www.acoraacoustics.com/
And as reported elsewhere.
https://www.cepro.com/audio-video/audio-research-acquired-by-ar-tube-audio-corporation/
June 21, 2023 Facebook post:
https://www.facebook.com/audioresearchcorp/
More legal details:
https://www.strata-gee.com/audio-research-corp-begins-its-next-chapter-as-ar-tube-audio-corporation/
Leporello
Well-known member
Just out of curiosity, is the Acoustic Research company still around? Did they have "AR" registered as a trade mark? It was confusing enough when there was "AR" and "Audio Research" or ARC.
I used to see the late Ed Vilchur in the audience at the Maverick summer chamber music festival in Woodstock, NY. Hope he's not rolling over in his grave now (as William Z. Johnson may be anyway),.
I used to see the late Ed Vilchur in the audience at the Maverick summer chamber music festival in Woodstock, NY. Hope he's not rolling over in his grave now (as William Z. Johnson may be anyway),.
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