Denon/Marantz - the end is near (or not)

[potatosalad]

Until we have an official statement from the group, I think it's best to treat this as a mere rumor.

In the meantime, the Korean division of Masimo Consumer (formerly Sound United) has officially stated that this is an unsubstantiated rumor, and product development, as well as after-sales support will continue as normal.

Apparently, Marantz will also unveil their new speakers next month.

 

[chelgrian]

Pioneer is out and Anthem doesn't do Dirac (and ART in 2025) What other AVR brand supports 7 bed layer and 6 top speakers plus 4 individual subwoofers?

You have to go upmarket, Storm Audio and Trinnov

 

[Frank207be]

You have to go upmarket, Storm Audio and Trinnov

That's why I'm so grateful that D&M broke through the 11.2 channel barrier at more affordable prices. The cheapest Trinnov and StormAudio are 3x to 5x more expensive than my AVC-A1H

 

[chelgrian]

View attachment 409873

Until we have an official statement from the group, I think it's best to treat this as a mere rumor.

In the meantime, the Korean division of Masimo Consumer (formerly Sound United) has officially stated that this is an unsubstantiated rumor, and product development, as well as after-sales support will continue as normal.

Apparently, Marantz will also unveil their new speakers next month.

Sadly if they do or are thinking about making a move which is financially material such as shutting down or spinning off the consumer products then the subsidiaries and most of the employees would not know about it until after a statement had been made to the market. So business as usual statements like this mean absolutely nothing.

 

[Oniiz86]

Well things are much more dire in Germany according to this article here https://www.heise.de/en/news/Denon-...-closure-allegedly-on-the-cards-10174776.html, several Masimo offices in Europe have or will be closed "In addition, Masimo has announced that all activities will be concentrated in the new office in Eindhoven (Netherlands). The offices in France, Finland, Switzerland and Germany have been or will be closed. As Masimo spoke of "not continuing" the division in case of doubt when presenting its financial report, the question now arises as to what alternatives remain to closing the business if no buyer is found." & a reputable specialist retailer Grobi.tv has revealed that D+M Germany in Nettetal will close down in the next few months, https://www.heimkinoverein.de/forum...dirac-update-gossip/?postID=449898#post449898 "The headquarters in Nettetal will be closed in the next few months, the remaining employees will be forced to work from home or possibly relocated to smaller offices. Personally, this worries me a lot and I think that we will experience some unpleasant surprises in the next few days and weeks. B&W in England also has very little to do at the moment and look at the price development here too. I'm curious to see what might happen there in the spring." & as everyone knows about Pioneer being no more, Grobi.tv had this to say here https://www.heimkinoverein.de/forum...dirac-update-gossip/?postID=451594#post451594 "Pioneer is now being shut down. The reasons are probably outstanding amounts that the parent company is not paying. The trademark rights have been taken back and nothing is coming off the production line anymore. Unfortunately, that's it for the products."

 

[Bleib]

Holy crap
Wonder why not some Chinese company is buying up, there would be a lot of tech to overtake, technical know-how, rights etc

 

[D700]

Before they go, someone on their ELT should ask “Why do these old models sell for $4K?”

 

[Oddball]

Well things are much more dire in Germany according to this article here https://www.heise.de/en/news/Denon-...-closure-allegedly-on-the-cards-10174776.html, several Masimo offices in Europe have or will be closed "In addition, Masimo has announced that all activities will be concentrated in the new office in Eindhoven (Netherlands). The offices in France, Finland, Switzerland and Germany have been or will be closed. As Masimo spoke of "not continuing" the division in case of doubt when presenting its financial report, the question now arises as to what alternatives remain to closing the business if no buyer is found." & a reputable specialist retailer Grobi.tv has revealed that D+M Germany in Nettetal will close down in the next few months, https://www.heimkinoverein.de/forum/thread/22893-neue-denon-marantz-av-receiver-für-2022-23-geleakt-z-t-mit-dirac-update-gossip/?postID=449898#post449898 "The headquarters in Nettetal will be closed in the next few months, the remaining employees will be forced to work from home or possibly relocated to smaller offices. Personally, this worries me a lot and I think that we will experience some unpleasant surprises in the next few days and weeks. B&W in England also has very little to do at the moment and look at the price development here too. I'm curious to see what might happen there in the spring." & as everyone knows about Pioneer being no more, Grobi.tv had this to say here https://www.heimkinoverein.de/forum/thread/22893-neue-denon-marantz-av-receiver-für-2022-23-geleakt-z-t-mit-dirac-update-gossip/?postID=451594#post451594 "Pioneer is now being shut down. The reasons are probably outstanding amounts that the parent company is not paying. The trademark rights have been taken back and nothing is coming off the production line anymore. Unfortunately, that's it for the products."

Sounds pretty disturbing, but not sure if info is interpreted correctly. "Discontinuing" to the best of my knowledge is reference to discontinuing operations which is accounting classification and for what it is worth Masimo commented that they will upkeep the brands to the best of their abilities. Based on the numbers, situation is definitively not so dire that would warrant closure of the business that at that point would be worth much less than ongoing concern business. Even if Masimo does not want to support financially any longer, there are last resort lenders that would probably be happy to jump in with financing at exuberant rates to bridge the gap between now and sale.

Rationalising the operations and closing down multiple local offices to consolidate all in a single central office is what most companies have done in the past if compatible with their business model. So this does not surprise me, but it is true that such move needs to be well managed to avoid customer and business partner disruption. I would expect also significant reduction of the number of products if not flat-out merging the brands into one Marantz/Denon and consolidating product lines even further.

 

[EWL5]

I don't see D&M shutting down. Masimo will sell Sound United at a loss to get it off their hands. I'm sure the selling price keeps dropping every week that goes by!

 

[chelgrian]

I don't see D&M shutting down. Masimo will sell Sound United at a loss to get it off their hands. I'm sure the selling price keeps dropping every week that goes by!

It is not a given that they can or will sell it as a going concern, they obviously would sell any assets they can to recoup money.

One of the reasons Voxx can’t sell its AVR division as a going concern is that the holders revoked the rights to use the Pioneer brand so Voxx will be forced in to a wind down and sale of any assets.

 

[D700]

I know there are fans here of their latest aesthetic…but really, this equipment is as much or even more an emotional, kinesthetic sale as it is auditory.

Cut the product line, amp up the romance and for gods sake, bring back some future retro, wood and virtual meters with great specs

 

[Putter]

While having no idea of how failing businesses are rescued, I'd point out that that Boston Acoustics has been gone for a long time and that they still have 3 different speaker companies competing in the same marketplace and now 4 with Marantz coming out with its own speakers. For god sakes consolidate the number of speaker brands and IMO eliminate Marantz since it seems like a fake upmarket Denon.

 

[GXAlan]

Sound United sure need a new management team with a very different approach.

But remember, the Sound United management team sold the company for a hefty sum. There are stories of company A selling to company B for a huge sum and then many years later, buying back Company A from company B at a discount

Marantz and Denon have brand equity. If it was $1 to buy the company, someone like Topping or Schiit could easily buy it and rebadge their products. If the company has debt, that is a different story. But if the company has debt, they could try to split the company, bankrupt it, and let the people who are owed money lose out. Even then, if the company is $1M in debt, they would sell the company for $1, so that the people owed 1M at least get $1.

So there is zero chance that Marantz or Denon disappear. There is a chance that Marantz and Denon *as we know it* can disappear. Think about Oppo disc players. No one both those assets.

If the situation is dire enough, the only company that could save D&M would be Bose, honestly. Or a wealthy private equity guy or billionaire doing it as an hobby.

 

[mhardy6647]

Before they go, someone on their ELT should ask “Why do these old models sell for $4K?”

Jaguar might be asking itself similar questions at the moment...

 

[chelgrian]

But remember, the Sound United management team sold the company for a hefty sum. There are stories of company A selling to company B for a huge sum and then many years later, buying back Company A from company B at a discount

Marantz and Denon have brand equity. If it was $1 to buy the company, someone like Topping or Schiit could easily buy it and rebadge their products. If the company has debt, that is a different story. But if the company has debt, they could try to split the company, bankrupt it, and let the people who are owed money lose out. Even then, if the company is $1M in debt, they would sell the company for $1, so that the people owed 1M at least get $1.

So there is zero chance that Marantz or Denon disappear. There is a chance that Marantz and Denon *as we know it* can disappear. Think about Oppo disc players. No one both those assets.

If the situation is dire enough, the only company that could save D&M would be Bose, honestly. Or a wealthy private equity guy or billionaire doing it as an hobby.

It’s complicated but yes the brands absolutely could disappear it’s rose tinted spectacles at the goodwill value of the brands to think they couldn’t.

Massimo have around $900m in debt much of it tied to the Sound United acquisition, they either rejected an offer of $850m to $900m for the consumer division back in July which would have essentially wiped out their debt and said they ‘intended to negotiate a higher price’ however no offer materialised and it seems the original offer disappeared.

You can’t ‘split the company and bankrupt it’ that doesn’t magically make debt disappear Massimo as the owner of the subsidiary company that it knew could not service the debt would still be on the hook for it. The legal position is different if the subsidiary was previously trading as a going concern, took out new debt on that basis which it then turned out it could not service due to a change in the market.

 

[Galliardist]

But remember, the Sound United management team sold the company for a hefty sum. There are stories of company A selling to company B for a huge sum and then many years later, buying back Company A from company B at a discount

Marantz and Denon have brand equity. If it was $1 to buy the company, someone like Topping or Schiit could easily buy it and rebadge their products. If the company has debt, that is a different story. But if the company has debt, they could try to split the company, bankrupt it, and let the people who are owed money lose out. Even then, if the company is $1M in debt, they would sell the company for $1, so that the people owed 1M at least get $1.

So there is zero chance that Marantz or Denon disappear. There is a chance that Marantz and Denon *as we know it* can disappear. Think about Oppo disc players. No one both those assets.

If the situation is dire enough, the only company that could save D&M would be Bose, honestly. Or a wealthy private equity guy or billionaire doing it as an hobby.

A key thing to remember with AVRs is that there are a lot of licensing and standards requirements that have to be met. We won't see many new small players wanting to get involved in that space, and if say D&M were split up, one half may end up with no licences and no licencing specialists. I think what happened with Oppo is that when they attempted to expand their range they took their eyes off licensing for their disc players

On top of that, Marantz particularly has a complex history and structure that must make it difficult for new management to understand.

The decline in sales is huge. I suspect though that Masimo took over at the top of a bump in sales due to Atmos,

The standard speaker market is set for slow but steady growth in the next decade or so, while smart speakers and soundbars are predicted to grow much faster. Marantz and Denon are still trying to sell standard CD players (may work in Japan, but elsewhere?) and the whole Sound United offering, apart from a small selection of new products, looks very dated. Rival brands are now all sat in companies with new mainstream product ranges that can support and inform the audiophile range

I suspect for Sound United it's all too little, too late. My solution would be for D&M to cut back to their core business and seriously modernise one of the two brands for the new market: shift B&W into the hands of a large business that can pull the designs into better shape and stop them producing those weird FRs and just ditch the other brands in the portfolio in whatever ways work.

I'm not sure what the minimum size for an effective AVR manufacturer is these days, though;. It may really be too late for any manufacturer who isn't also into TVs and production gear. Maybe their future is really LG?

 

[restorer-john]

It's no great loss.

I'd like to see Japanese interests buy Denon and Marantz brands for cents on the dollar and service their home market with proper HiFi. Forget the rest of the world, with 124 million people at home.

The Marantz and Denon brands are revered in Japan.

 

[Dj7675]

It's no great loss.

I'd like to see Japanese interests buy Denon and Marantz brands for cents on the dollar and service their home market with proper HiFi. Forget the rest of the world, with 124 million people at home.

The Marantz and Denon brands are revered in Japan.

It could be a great loss of home theater consumers.

 

[Deleted member 77012]

The Marantz and Denon brands are revered in Japan.

Not only there, for sure.

Question is: Will it help?

 

[GXAlan]

A key thing to remember with AVRs is that there are a lot of licensing and standards requirements that have to be met. We won't see many new small players wanting to get involved in that space, and if say D&M were split up, one half may end up with no licences and no licencing specialists.

Agreed, but you still have Sony and Yamaha who likely have profitable AVR divisions by focusing on slower innovation which sounds bad, but also ensures stability of the business.

I think what happened with Oppo is that when they attempted to expand their range they took their eyes off licensing for their disc players

Actually, the problem was that Oppo got into smartphones. By the math, they are half the size of Apple in global market share. They basically quit the hifi business for something a lot more profitable.

smart speakers and soundbars are predicted to grow much faster. Marantz and Denon are still trying to sell standard CD players (may work in Japan, but elsewhere?) and the whole Sound United offering, apart from a small selection of new products, looks very dated. Rival brands are now all sat in companies with new mainstream product ranges that can support and inform the audiophile range

It’s weird because D&M were early with Heos and wireless rear speakers and their software (HDMI CEC) is robust. If you look at the Audyssey patents, a lot of them are assigned to Sound United so they have access to premium room EQ without licensing fees. They should be awesome at soundbars and wireless lifestyle products.

shift B&W into the hands of a large business that can pull the designs into better shape and stop them producing those weird FRs

But if the B&W sound is identical to KEF or Revel, will people buy it? Part of the weird FR helps to make it different.

Maybe their future is really LG?

Possibly. LG is forward thinking having bought Kodak’s OLED IP and Palm’s webOS IP. They may want to have a counterpoint to Samsung. On the other hand, they had to scale back their smartphone efforts.

If McIntosh did well, which I assume it did, private equity may pick up Sound United. Revive it and then spin it out or IPO in the future. If McIntosh was a money loser for PE, then D&M may surprisingly die like Altec Lansing, Fisher, Scott, Philips, Magnavox, RCA, Sansui, etc .