ARC in receivership

[djcxxx]

It has been reported that ARC has filed court documents assigning receivership to Lighthouse Management Corporation. Evidently this allows avoidance of Chapter 7 or 11, but it remains to be seen if the company will survive and in what status. IMHO the issues are most likely the loss of key design people, parts sourcing and reliability, and the inability to maintain a sufficient work force of highly skilled technicians. The backlog of repair orders stretches months. The Ref 320M was shown at Munich a year ago, but never made it to market. Capital and management are essential to success in the audio business, but are meaningless without the engineering and circuit design people creating the gear, and repairing it when required. That is how ARC stayed the course for over 50 years.

[Juspassin'bye]

Though I have never owned ARC gear....it is very sad to see top notch
audio gear makers go into receivership...

Wishing them well!!

[cleeds]

This is the first I've heard of this. It's very sad if it's true, regardless of the ultimate outcome.

[cleeds]

I now have some of the court filings so I can sadly confirm that the news of receivership is true. The filing was made April 3, so this has been underway for a while. The filing contains a long list of creditors who include my local ARC dealer. So this is going to cause a lot of pain for many people.

A court hearing has been set for May 17. (Minnesota Judicial Branch, Hennepin County Civil)

[Formerly YB-2]

Very sad. Hope they make it thru all this.
Again, am sure a big part of their problem is all the Chinese gear that is flooding the market and killing off NA manufacturers. And all the pimping of Chinese gear done by the large e-tailers like MoFi/Music Direct & Up-Scale, to name a couple. Folks I'll never do business with again.

[PeterMusic]

Originally Posted by Formerly YB-2

Very sad. Hope they make it thru all this.
Again, am sure a big part of their problem is all the Chinese gear that is flooding the market and killing off NA manufacturers. And all the pimping of Chinese gear done by the large e-tailers like MoFi/Music Direct & Up-Scale, to name a couple. Folks I'll never do business with again.

I agree they are in a tough spot from a business perspective, but I don't think their target customers are buying Chinese stuff from MoFi. Sadly, I think their target customers are disappearing or buying AV surround stuff. (Plus, I really appreciate MoFi's efforts with vinyl, imperfect as they are)

[Formerly YB-2]

Originally Posted by PeterMusic

................but I don't think their target customers are buying Chinese stuff from MoFi............

Wish you were correct, but ARC vs Prima Luna (Chinese) at 1/3 the cost (or less) likely sways many folks.

[PeterMusic]

Originally Posted by Formerly YB-2

Wish you were correct, but ARC vs Prima Luna (Chinese) at 1/3 the cost (or less) likely sways many folks.

Ooo...I did not realize Prima Luna was made in China. I agree that's a fair comparison

[Antonmb]

Originally Posted by Formerly YB-2

Very sad. Hope they make it thru all this.
Again, am sure a big part of their problem is all the Chinese gear that is flooding the market and killing off NA manufacturers. And all the pimping of Chinese gear done by the large e-tailers like MoFi/Music Direct & Up-Scale, to name a couple. Folks I'll never do business with again.

Many American and European firms in the high end of the market, including I believe ARC, are not really directly competing with the Chinese. I don’t think the people buying brands like ARC, D’Agostino, Wilson, Pass, etc., are seriously distracted by Music Direct Chinese offerings. It looks a lot more like the vp of sales who purchased ARC less than 3 years ago simply was over-leveraged and underfunded, bought when the market was in a boom, and couldn’t sustain his debt payments when the market went into a post-Covid slow-down at the same time interest rates and supplier costs went up.

[tima]

Originally Posted by Antonmb

Many American and European firms in the high end of the market, including I believe ARC, are not really directly competing with the Chinese. I don’t think the people buying brands like ARC, D’Agostino, Wilson, Pass, etc., are seriously distracted by Music Direct Chinese offerings. It looks a lot more like the vp of sales who purchased ARC less than 3 years ago simply was over-leveraged and underfunded, bought when the market was in a boom, and couldn’t sustain his debt payments when the market went into a post-Covid slow-down at the same time interest rates and supplier costs went up.

Thanks Tony, this sounds reasonable to me. Granted there is more competition everywhere from Eastern manufacturers and the high-end market in the East is huge. Small distributors looking to gain a foothold in audio will pick-up smaller company products and promote them. So there is a lot more competition.

ARC is an iconic brand built from the ground up and the company has a long history of success. They have had several owners since the passing of their founder, some better suited to their culture than others. Owned by the McIntosh Group (a direct competitor) who also owned Sonus Faber, ARC was subject to management decisions no longer made in Maple Grove. Product wrapper design came out of Italy from Livio Cucuzza. Some of this was not a happiness for in-house ARC and its traditions. TWS LLC was a company created by Trent Suggs, a former ARC sales director, to return, I suspect, the company to its roots. But there was no financial backing behind Suggs.

I expect a financier to appear and the company to continue. Hopefully that will be someone who not only understands their value but is committed to sustaining it without trying to turn it into a lilfe-style product following fast moving trends. Several of the core people such as Dave Gordon, Warren Gehl are still there to keep WZJ's vision alive.

Imo, their challenges are building off proven designs, which they've done a lot -- from the Ref3 linestage, to adopting the 6H30 tube in the Ref2/Ref5 models and their follow-ons, the Ref 10 series and the Ref3/Ref6 sustained them through the 21st century thus far. And, to find new design talent.