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Schimmel & Pearl River – A Partnership for 2017 and Beyond

by Christian Wissmuller • in
  • Issue Articles
• Created: January 26, 2017

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A celebrated German piano brand dating back to the 19th century, Schimmel Pianos has a storied history – and now a bright future.

In the early days of 2016, China’s Pearl River Piano Group acquired over 90 percent of the company’s shares, providing additional financial stability, and – as importantly – a greatly enhanced point of entry to the growing and profitable Chinese market.

Hanns Schimmel-VogelWe recently sat down with CEO Hannes Schimmel-Vogel to discuss the brand’s rich history, the family’s restructuring of the company in 2010, the recent partnership with Pearl River, and what he expects for the future…

To bring our readers up to speed, can you provide a brief background of Schimmel Pianos, from the founding by Wilhelm through the evolution to the mid 2000s?

Wilhelm Schimmel (1854-1946) founded the Schimmel Piano Company in 1885 in Leipzig under the name Wilhelm Schimmel Pianofortefabrik. Wilhelm was a well- trained and experienced carpenter and piano technician by profession and a technical genius and inventor by nature.

From the very beginning, Wilhelm followed his motto “Quality will prevail” and thanks to his very rigid quality policy the young company grew fast and became known for quality and design.

His efforts and success resulted in many awards and early export sales. Several royal families and nobilities soon appointed Schimmel and Schimmel won several medals at Trade Fairs and Exhibitions. At one such event a newspaper wrote, “It was this upright, the tone of which had first captured attention, and after testing the performance of the instrument, we must confess that, in its sonority as well as delicacy and beauty of tone, it is in no way inferior to the best uprights of the select few top-selling international ‘name brands’.” In the meantime, Wilhelm’s brother, Fridolin Schimmel, had started his own piano company in Faribault, Minnesota and was challenging his brother on the other side of the Atlantic. Being of the same nature, he was also a successful piano manufacturer and held patents for inventions in many other industries as well.

In 1927, at the age of 73, Wilhelm Schimmel retired from active management of the company, passing the mantle to his son Arno Wilhelm Schimmel. This took place as the world economy was going through a difficult phase known as The Great Depression, culminating two years later in the stock market crash on Black Thursday.

Starting his generation’s era with this immense challenge, Arno reacted quickly and actively by moving the company to Braunschweig, Germany where circumstances were more favorable than in Leipzig. This decision turned out to be a very fortunate one because 20 years later after World War II, Leipzig was part of East Germany whereas Braunschweig was in West Germany.

In addition, Arno showed his immense talent by developing several very successful designs, patents and instruments in his first few years at the helm. With their musical abilities and the modern designs, Arno’s pianos were second to none and in 1958 Schimmel pianos became the world’s best-selling instruments of German origin.

The masterpiece of Arno’s era was in 1951 with the first clear Plexiglas grand ever built. Besides the sheer genius of engineering and designing this unique small grand piano, the impression of it was overwhelming, especially considering that at that time post-war Europe was in ruins and was an unpleasant environment.

In 1959, at the age of 25, Nikolaus Wilhelm Schimmel joined the company to learn from his father and slowly begin taking on the responsibilities of the company. Before he joined, he had spent many years in piano stores and factories in Europe and the United States learning all aspects of the piano business.

In 1961, Arno died suddenly and unexpectedly and Nikolaus had to assume responsibility for the company. Based on his clear vision Nikolaus continued and built on his father’s achievements.

The Wirtschaftswunder (Economic Miracle) of West Germany was in full bloom and Schimmel once again had to expand its capacity and facilities. Over several years, Nikolaus built the most modern production facility in Germany and provided the additional capacity so desperately needed.

In his era, Nikolaus also created outstanding piano designs and, in cooperation with renowned artist and professor Luigi Colani, grands that were monuments of art like the Pegasus. In addition, modern technology and new thinking was introduced into production: Schimmel‘s CAPE-System (Computer-Assisted Piano Engineering) was the first-ever virtual device to design pianos. Being a marketing genius, Nikolaus made Schimmel not only the number-one-selling German piano but also the best-known German brand.

At the turn of this century, Nikolaus started to pass on responsibilities to the next generation and in 2003, Viola Schimmel and her husband Hannes Schimmel-Vogel took the mantle from Nikolaus, who still to this day regularly visits the factory. Viola Schimmel and Hannes Schimmel-Vogel’s first moves were to expand the model portfolio through Schimmel’s premium strategy that led to the Schimmel Konzert Series. At the same time, a new production facility in Kalisz (Poland) was opened in order to be able to offer competitive value instruments made in Europe. This soon resulted in a series of record sales years in North America.

In the following years, this brand and model strategy was continuously developed and is reflected in Schimmel’s current family of brands: Schimmel Konzert and Schimmel Classic, (both made in Germany) and Wilhelm Schimmel (made in Europe.)

Since 2003, Schimmel has continued to register many patents and protections of registered designs. Aside from the musical aspects of the Schimmel model line-up, the focus has also been on the aesthetics of the instruments. Schimmel’s instruments feature a unique combination of technical innovations and cabinet designs. These efforts have resulted in Schimmel being the most awarded piano brand from Germany.

Very thorough – That covers it! Can you discuss the restructuring and eventual full ownership by the Schimmel family post-2010?

Schimmel was heavily affected by the financial crisis and recession in the United States between 2007 and 2009. The strategy for success in the United States that they had built over several generations suddenly became a disadvantage: Business in the US almost came to a full stop after the Lehman Brothers crash. Aside from the precipitous drop in retail sales, the crisis of the inventory finance companies exiting the piano industry was burdening the industry’s performance.

Schimmel went into a program similar to the United States Chapter 11 reorganization to restructure its financing and other equity positions. In addition, the company became 100 percent family- owned again, after 20 years with Yamaha having been a 24.9% shareholder.

While many other brands turned away from the American market, Schimmel stayed and supported its dealer network. With Schimmel’s long history in North America and with Fridolin Schimmel’s piano-making history in the United States this was a clear decision.

Last January, Pearl River acquired 90 percent of the shares of Schimmel. Can you talk about what brought about that move and how things have evolved over the past year?

Even as most markets in the western world never fully recovered from the drop after the “Great Recession” of 2007 to 2009 Schimmel managed to increase its sales volume in the years after 2010 by keeping its innovative approach and expanding its product lines. As just one example, Schimmel added an entry-level line called Fridolin Schimmel for the North-American market, a line that honors the founder’s brother and that American family connection.

Still, when looking ahead at the decades to come with the foreseeable dramatic changes in the industry, the Schimmel family openly discussed several options to face these challenges. The goal was to find a strategic approach that allowed a proactive rather than re-active business model as well as long-term access to digital technology and to China, the largest and only expanding market in the piano industry.

Aside from the unimaginable difficulty of thinking about and discussing such options, the main aim was to make a decision that focused on the long-term benefit of Schimmel’s dealers, their employees, and the Schimmel brand. The conclusion was that partnering with a strong company from China was the best solution. Pearl River, being the largest and strongest company in the piano industry with an unchallenged position and presence in the China market, was the logical partner. The financial resources and the long-term strategic orientation of Pearl River are not only ensuring the future of Schimmel’s German and Polish facilities but, even more, the continuous growth of our brand as a synonym for innovation, quality, and craftsmanship.

Already, the first few months of this strategic alliance are confirming that a very solid foundation for the future has been laid and that it has been the right move for Schimmel.

What challenges are presented by being a brand so closely identified as a “German Instrument Supplier” yet now one which is part of a Chinese company?

From an objective point of view, the Pearl River alliance has no influence on Schimmel’s German identity because Pearl River’s aim is to continue and even strengthen the German production facility. Also, with the Schimmel family being involved and managing the company, the identity of Schimmel goes beyond being only a German supplier. A Schimmel family-run company with the Schimmel name on the pianos assures product integrity.

Of course, from a subjective point of view, there are challenges but this mainly has to do with competitor misinformation.

What’s on the horizon for Schimmel in the coming months – new instrument introductions, et cetera?

The most important item on the horizon is continuity in production and products. Considering the above-mentioned competitor misinformation, the main task is to give confidence and continuous reassurance to our dealers.

The main change in Schimmel’s product line this year will be the all new uprights and marketing concept for the Fridolin Schimmel brand. This brand, introduced in 2015, has been a cooperatve effort with Young Chang North America who built and sold these instruments. At NAMM this month, Schimmel will present new uprights based on Schimmel-designed scales, marketed and sold by Schimmel. The instruments will be made by Pearl River according to Schimmel specifications and in cooperation with the Schimmel technical team.

The Fridolin Schimmel brand is part of our strategic plan to grow our business in the United States and Canada in the next years.

Finally, what are your predictions for the coming year?

We expect the market for acoustic pianos to continue to be challenging. Holding numbers or growing can only be done by taking market share from others. China seems to remain the only exception with a stable market and an increasing volume in the middle and premium segments.

Schimmel and Pearl River are well positioned for the future: In the western markets Schimmel will have an active position and increase its sales. In the Chinese market with all its special requirements, Pearl River will make Schimmel one of the first western brands to be truly successful in China. In the United States, we expect to widen our dealer network and re-open markets based on offering a new price-point with the Fridolin Schimmel line.

Any parting thoughts or comments for MMR readers?

Someone once said that we, as people, are defined less by what we do than by how we do it. Schimmel builds pianos with great care and attention to detail based on a wealth of experience for over 130 years. In an industry that is quite different from only 10 years ago, Schimmel is now in a position to help our dealers continue to be successful in this industry in the future.

For more information about Schimmel, and to see our exciting line of pianos, visit NAMM room 206A on the second floor.

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