‘Business transitions’ is usually a euphemism for costs of severance, office closures or winding down a product line. Especially if they are gearing for a sale then any buyer with a clue would want this done before they take over so it’s associated with the old owners and they don’t immediately burn any good will left by firing a load of people.
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Denon/Marantz - the end is near
- Thread starter PHD
- Start date
Galliardist
Major Contributor
Unfortunately, we don't know what is happening within the different audio brands from these figures. It looks to me as if they had a successful Black Friday firesale and that the situation overall is somewhat worse even than those figures show. Now, having said that, Masimo bought in at exactly the wrong moment - some of the Sound United brands did well out of covid, with a large number of items bought at the same time by a large part of the potential market. The best way to treat the Sound United brands at the moment is to see them as selling at a slightly lower volume even than they are now, but possibly solid at those lower levels.
The problems at Sound United are what they have always be en - overly conservative management, poor development in the AVRs, and the wrong innovations in the higher end stereo products in particular. In terms of software, they are a mess, and they just can't afford to be, because that's the product these days. Years of promising Dirac products has just led consumers to undervalue what they already had onboard.
But now SU is together, I don't see how splitting it up works, unless each division ends up with an owner who understands the market and has money to develop product more attuned to the market. As a unit, they can survive - but they need to throw away the brand books, cut a lot of their product range across the brands, and seriously improve their software and educate the customer base around the software decisions they make.
Well the good news is that they are getting somewhere with the sale.
Don't really have time or energy to dig into their financials, but yeah, transition cost could be a separate cost of the restructuring (whatever that is - should be more about what it is in disclosure for decent financials). But then there could be a separate cost of impairment for the value of the SU business as at the end of each quarter/year companies should go through that testing.
I am just interested in SU finding a new and better home.
Don't really have time or energy to dig into their financials, but yeah, transition cost could be a separate cost of the restructuring (whatever that is - should be more about what it is in disclosure for decent financials). But then there could be a separate cost of impairment for the value of the SU business as at the end of each quarter/year companies should go through that testing.
I am just interested in SU finding a new and better home.
Picking circuits from a "standard bin of parts" as @amirm has called it isn't great for innovation.
With many brands all under the SU umbrella there isn't much competition between those brands to drive development. Only potentially with external brands.
Conversely, you could argue that by combining the brands they should have more budget to put into R&D, but we don't seem to see that, with the pace of technological development being rather gradual.
If the brands were separated to actually compete with independent designs it might benefit consumers. Unfortunately it could go the other way, with inadequate funding in each individual brand to develop new designs and eventually some brands failing.
Sadly mid to high end AVRs and AV hardware seems to be quite a niche market. Perhaps it could make sense for TV manufacturers like LG to be more prominent in this area, and maybe help to make appreciation of good sound more mainstream?
Could the "transition costs" mean they taking money out of the non-healthcare business to prop up the healthcare one?
But all the innovation is in software. Even the poorly performing older generation Marantz AVRs with low SINAD are probably audibly transparent.
You do have creativity at SU, with the Marantz 10 series being a nice example, but focusing on some of the esoteric luxury hifi doesn’t make sense. D&M are still one of the lowest cost solutions for 4 Sun outputs and their HDMI CEC reliability is up at the top.
The TV manufacturers have been there, done that. Sony has first to market with class D AVRs and their Trinnov-like 3D soundfield processing was well received both in the HTIB world as well as the current AZ ES receiver line up. Some early adopters had noise problems when the feature was engaged but my understanding is that newer hardware releases are better.
But I don’t think the Sony sells that well.
Same with Samsung. They had an ice power based AVR in the 1080p Blu-Ray era and today, they own Harman.
The appreciation of good sound mainstream is that you get 90% of the way to hifi enjoyment with modern soundbars from companies like Sonos. Look at Amir’s official review of the Sonos Five or my own measurements of the Era 300.
It could, but they have consolidated financials with some divisional/segment reporting. You would need to look into disclosures in financials - best practice is to give some detail for restructuring cost, but some companies don't. Some of the cost would be for D&M directly as they closed a bunch of operations in EU and consolidated them in the Dutch headquarters.
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