Big Dog RJ wrote: ↑Thu May 04, 2023 9:27 am
Trent Suggs seems like a great chap. They say that he looks after his team of "associates" and never refers to them as employees. Also is very passionate about the company and brand, so wondering how on earth did ARC end up in a financial pickle... what was it that he did so badly in? To a such a point that he had to leave. That's a real shame, wonder how he's feeling about the whole thing.
There's always two sides of the story... would be very interesting to learn about his side from him of course.
Mmm... interesting times ahead for ARC.
Until then, keep those tubes glowing!
Cheers, RJ
It was most likely related to debt service.
We have had 10 increases in the Fed interest rate in just a relatively short time. The rate now stands at 5.25%. By pre 2008 standards, this is low. But by the standards of the last 15 years, it is mountainously high. It is the difference between debt service being in the noise level and debilitating debt service that consumes the profit.
It’s just stuff. I like mine. I hope you like yours. I probably like yours too.
It’s mentioned in post 98 of that thread that the I/50 may have been the critical slip of their own doing. The interest rate rise exacerbated the pressure.
It is easy to understand why they introduced this desktop multi-color unit. The expectation was that it would appeal to young people who buy entry level products on fashion, and also to decorator conscious installations where spouse acceptance is desired. But it just doesn’t seem to have ever gotten legs. I knew when they allowed internet sales, that the I/50 inventory must be a problem.
It’s just stuff. I like mine. I hope you like yours. I probably like yours too.
Mmm... this is not good. Certainly didn't see this coming. Well, what I meant was, I didn't expect this from Trent Suggs! He should have known better. This is what happens when you borrow more than you could afford to lose, and not paying back ends up in debt and you're labelled as "default." Definitely not a good place to be in.
As someone had replied in that post on the link, that's the best advice. Which is, file for proper bankruptcy then pay off whatever debt possible, draw up a clean sheet and start from a clean slate. Set aside the high priced vacuum tube gear, offer some "affordable" gear, make enough sales, cover the losses and pay off any remaining debt. Then and only then, start building high-end vacuum tube gear again, and the ARC legacy will live on.
ARC refused to offer anything entry-level, and the masses could not afford their very high priced tube gear. As a result, people will go for many other brands, McIntosh, Parasound, Bryston, even CJ makes some affordable tube gear that is not highend but still is a CJ tube product! It was too late when ARC introduced the I Series amps in different colors, trying to capture the younger audio high tech IT savvy customer. These guys aren't interested in tubes, they rather plug in their ear buds / headphones, download some itunes and listening to their wireless speakers. This is NOT ARC territory but ARC meant well trying to introduce such gear, it didn't work.
And on top of that, Trent S kept defaulting on his loans, accruing more and more debt. Sad story indeed. I'm a bit annoyed at this Trent chap, he should have known better or at least sought assistance on how to run a business, especially a high-end audio one. If he really didn't want to cater to the entry-level market, then make only a handful of products, like maybe just 4-5 items. Do them really well and make enough profit to cover the loans, and most of all, don't take large loans! This would have been a case study in one of my Masters Business courses, which I did in 2007. That may seem outdated by now but the bottom line remains the same, don't borrow unless you can pay back within a reasonable time frame. Otherwise you will be at default! This maties is a textbook rule in finance!
I can only hope that someone will bail them out, and this person has to have a big heart and a true passion for ARC and the brand. No I wasn't that second person who put their hand up... but I do have a big heart and a true passion for Tubes, not persistent to any brand as such, although all my tube gear is CJ. I've got other life priorities to attend to but if there's a will then there's certainly a way. I would have liked to take on this offer, jokes aside... the only thing is, I'm based in OZ and not the US. Can't leave the family for a broke audio company, I won't do that.
I do wish ARC all the very best. It's not a mammoth task to get this brand back on track but it will take an awful lot of perseverance.
Cheers, RJ
I really hope they find somebody to come in and buy the company. If they are truly doing $30M of business a year, it seems like paying less than 1/10th of annual revenue would not be an outrageous proposition to get the company on its feet. Of course the underlying question is how to make it profitable? I really have my fingers crossed for them.
-admin Home Theater in Member Gallery Main stereo: ART Amplifier and ET7s2. 2nd stereo: PV-14L and MV-55. Previously Owned: PF2 preamp, Evolution 2000 Amp, PV-12AL preamp, D/A-2b Vacuum-Tube Digital Processor.
ML CLX BF-210 Stage X Motion 4. CJ 120SE amp ET7V2 pre, Holo May Kte Dac. Mac Pro. Power Cond. BPT Signature+ 3.5, Gaia II Feet. USB Lush^V3. Nordost SPM IC and Spk. Shun Mook, BCanto CD2 CD3. Linn LP-12/Unitrack tonearm/Denon DL103R MC.
But the fresh news say bankruptcy...it is a good sounding goods made by ARC. It is a shame if the firm goes out of business.
I hope not!
ML CLX BF-210 Stage X Motion 4. CJ 120SE amp ET7V2 pre, Holo May Kte Dac. Mac Pro. Power Cond. BPT Signature+ 3.5, Gaia II Feet. USB Lush^V3. Nordost SPM IC and Spk. Shun Mook, BCanto CD2 CD3. Linn LP-12/Unitrack tonearm/Denon DL103R MC.
FWIW, this will not be a fire sale.
There are enough interested parties that the receiver is comfortable that the time required to choose the best one will be well spent for all creditors.
It’s just stuff. I like mine. I hope you like yours. I probably like yours too.
The banks are hurting because of the irresponsible rise in interest rates.... inflation due to regulations is out of control, the flow of cash is slowing down, the economy is hurting because companies (ARC) are not getting paid... small companies are getting raped... hence this mess.
ARC is not gonna be the only company in this problem... You can see what CJ is doing, going "smaller"... 2024 can not come soon enough.
I'm really interested in seeing who plans to take over. It looks like ARC will live on!
-admin Home Theater in Member Gallery Main stereo: ART Amplifier and ET7s2. 2nd stereo: PV-14L and MV-55. Previously Owned: PF2 preamp, Evolution 2000 Amp, PV-12AL preamp, D/A-2b Vacuum-Tube Digital Processor.
That's good to hear. Both that they have somebody coming in but also that they will maintain their independent brand.
-admin Home Theater in Member Gallery Main stereo: ART Amplifier and ET7s2. 2nd stereo: PV-14L and MV-55. Previously Owned: PF2 preamp, Evolution 2000 Amp, PV-12AL preamp, D/A-2b Vacuum-Tube Digital Processor.
