Sam Ash Music Corporation

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Sam Ash Music Corporation

278 Duffy Avenue
Hicksville, New York 11801
U.S.A.
(516) 932-6400
Fax: (516) 822-8443
Web sites: http://www.samash.com
http://www.samsontech.com

Private Company
Founded: 1924
Employees: 1,000
Sales: $260 million (1998 est.)
NAIC: 45114 Musical Instrument & Supplies Stores; 44312 Computer & Software Stores; 33431 Audio & Video Equipment Manufacturing

Sam Ash Music Corporation is the second largest musical instrument retailer in the United States. The private, family-held company trails closely behind industry leader Guitar Center, Inc., a public company with 1998 revenues of $391.7 million. The company operates approximately 30 discount superstores across California, Connecticut, Florida, Illinois, New Jersey, New York, Ohio, and Pennsylvania. Sam Ash also sells sheet music, recording equipment, electronics, videos, computers, software, and vintage guitars, and also offers custom-built instruments and music clinics. All of the stores feature rooms in which customers are encouraged to try out instruments.

Family Founded: 1924

Violinist Sam Ashkynase immigrated to the United States at the turn of the 20th century, along with his wife Rose. A performer, he was often on the road in order to make a living for himself and his small family and decided, after re-evaluating his career, to change the situation. Rose pawned her diamond engagement ring for $400. With the money, the two of them leased a tiny 500-square-foot shop in an out of the way, rundown area of Brooklyn in 1924. There they sold wind-up phonographs, sheet music, and the occasional violin.

Deciding that Ashkynase was too difficult to pronounce, the couple shortened their last name to Ash. Over the next 18 years, with their sons, Jerome and Paul, they struggled to make the store a success, living in the three rooms behind the store. The two boys ran the odd errand as they grew up, but eventually joined in the day-to-day operations, all of them working 14-hour days, seven days a week. Ash soon gained a reputation as a vendor who was willing to do just about anything for his customers, from a midnight repair of something to delivering products across town.

They survived the Great Depression through sheer willpower, and managed to scrape together enough money to move to a larger, better shop on a main thoroughfare in Brooklyn. The business began to prosper, and the Ashes were finally able to maintain a comfortable living.

Changing of the Guard, Expansion: 1956

Sam Ash died suddenly in 1956 and his wife and sons took over the business. Almost immediately thereafter, the boys began looking for ways to grow the business, launching an aggressive expansion campaign. The two opened a satellite store on Long Island, and then grew into a huge, five-storefront megastore on Manhattan’s famous “Music Row,” more commonly referred to in the real world as West 48th Street. Nearly 25 years after opening, the Music Row shop was one of the “most impressive” the company owned, according to Lisa Josefak’s October 1996 article in LI Business News, “grown to a complex housing nine store fronts with individual shops dedicated to live sound guitars, pro-keyboards, home keyboards, sheet music, string, brass, wind, and wood instruments, drums, computers and recording. ‘We take up both sides of the street,’” Jerome said.

Another store was opened in Hempstead, New York, in 1961. That was followed three years later by an opening at Huntington Station. In 1966, three more stores were added, in King of Prussia, Pennsylvania, and Miami Lakes and Margate, Florida.

Samson Technologies Corp.: 1980

In 1980 the brothers made a commitment to furthering technology in the music performance industry with the founding of Samson Technologies Corp. From the beginning, this Syosset, New York-based subsidiary was dedicated to making wireless technology problem-free, easy-to-use, and accessible for everyone. In the early 1980s, Samson was among the first to introduce dependable VHP systems that helped popularize the use of wireless in different performance and public speaking applications. Later, the company’s Broadcast Series broke new ground with a synthesized receiver in a solid-metal, 19-inch rackmount format which, for the first time, offered wireless users the choice of ten selectable VHP channels.

As various sound and transmission systems evolved, the Samson web site declares, the company never lost sight of the small but critical details that made wireless user friendly. One example was handheld transmitters that included a full complement of on-board controls, and a choice of microphone elements so performers could always have sound when they went to wireless transmissions. Attacking the problem of residual noise head on, Samson pioneered the use of dbx Noise Reduction in wireless. This critically acclaimed technology significantly eliminated noise without artificially coloring the signal, a major concern for musical performers. The company also utilized its long-term experience to create a new and unique line of microphones specifically designed for wireless, including QMIC, a high-output microphone designed to keep feedback to a minimum. Samson also created Microprocessor True Diversity circuitry, which scanned incoming signals at over 200,000 times a second to ensure the best possible reception under the most adverse conditions. By 1998 the privately held subsidiary of Sam Ash had posted total revenues of $37 million and employed 75 people.

Branching out into New Areas of Music: 1988–90

In 1988 the company created the Sam Ash Professional Division to manufacture and sell household audio and video equipment, including audio recorders; radio and television broadcasting and communications equipment; and computers and software. The division was conceived to meet the needs of recording studios, broadcasters, and post-production houses. By 1995, it boasted 12 employees and was bringing in $7 million in total revenue. The company also opened the Sam Ash Music Institute in New York in 1990, an accredited school featuring classes in recording and synthesis.

By October 1996, the company had 13 stores, spread across New York, New Jersey, Connecticut, Florida, and Pennsylvania, and was generating nearly $190 million in annual revenue. In November of that year, both Sam Ash and Guitar Center, the two largest chains of music stores in the United States, opened stores in Cleveland. The opening of the Sam Ash store brought the total number of stores in the company’s stable to 14, extending its reach further into the heartland of America. Agoura Hills, California-based Guitar Center, meanwhile, was up to 28 stores, and planned to open an additional seven at that point.

According to Stan Bullard, in a November 1996 article in Grain’s Cleveland Business, a “study by Music Trade magazine cited in Guitar Center’s SEC filing said the music instrument industry’s sales are increasing by 7 percent annually. The nation’s five largest music products retailers have just 8 percent of the $5.5 billion market in the United States.” Presumably then, there was plenty of room for Sam Ash to grow, both via acquisitions and the opening of new retail stores. That year, the company was a finalist in the 1996 LI Entrepreneur of the Year Awards, “for demonstrating excellence and extraordinary success in such areas as innovation, financial performance, and personal commitment to their business and community.”

In June 1997, Mackie Designs Inc., a manufacturer of sound mixers for the music industry, filed a lawsuit against Sam Ash, its subsidiary Samson Technologies, and German studio electronics firm Behringer Spezielle Studio-Technick Gmbh, for breach of contract, unfair competition, and copyright, trademark, and patent violations. In the lawsuit, Mackie was seeking $327 million in damages caused by the alleged manufacture and sale of Mackie products by the defendants, violating a 1993 dealer agreement with Mackie. The main defendant in the suit was Behringer which, Mackie said, had “a history of copying other companies’ products and selling them as its own,” citing an instance of Behringer manufacturing and selling a product based on one manufactured by California-based Aphex Systems, Ltd. (Aphex successfully sued and won damages of $1.187 million). According to the suit, when Behringer decided to enter the mixer market, it formed a “copying partnership” with Sam Ash in order to manufacture “knockoffs” of various Mackie products. In July 1998, Sam Ash and Samson Technologies returned a lawsuit to Mackie, alleging defamation by the Woodinville, Washington-based console manufacturer, alleging that Mackie “engaged in a concerted campaign to defame the reputation, business, and character” of the companies by taking “the unusual step of publishing its complaint on the Internet before trying its weak case in a court of law,” stated a press release by Sam Ash. The company believed that the Mackie suit “was an unfair attempt to damage the business of Samson and Behringer and reduce competition in the industry.” Samson went on to posit “that the purpose of the lawsuit [was] to obtain discovery of the trade secrets that have made Behringer products strong competition for Mackie.”

Company Perspectives:

Sam Ash Music Corporation is dedicated to providing products and services to the music industry, ranging from musical instruments and sheet music to recording equipment, at lower prices than its competitors. We truly appreciate your business and want you to be happy with your purchase.

Rapid Expansion, West Coast Stores: 1998

In February 1998, the East Coast music retailing giant expanded to the West Coast with the opening of stores in Westminster, Cerritos, West Hollywood, and Canoga Park, California, bringing the total number of Sam Ash stores to 19 across the United States. In September, the company stepped up its expansion rather rapidly, opening ten new stores throughout the country over the next 12 months. Four were opened in Chicago during the fourth quarter of fiscal 1998, with another three going to Los Angeles and Orange County, California, early in 1999, joining the four stores already in that area. Three additional stores were opened in northern California and along the East Coast. The new stores expanded the company’s existing store base from 20 to 30. Total sales for 1998 jumped 28.7 percent to $260 million.

In the late 1990s, the company’s Samson Technologies subsidiary teamed up with Riverdance —The Show, the hit, sold-out Irish music, song, and dance extravaganza which toured the United States, Great Britain, and Australia in three separate productions. Samson, through its Handheld Audio in Great Britain distributor, provided nearly 60 UHF Series 4, UHF Synth Series 5, and UHF Synth Series 6 systems to mike vocals and instruments and stage, as well as the taps on the dancer’s shoes, using microphones embedded in the heels, in conjunction with beltpack transmitters cleverly concealed on the dancer’s bodies.

In August 1999, Sam Ash snapped up Manny’s Music Store, a New York store which was touted as a “haven for musicians.” At the end of 1999, the company was still privately held, and still run by numerous members of the Ash family, including Sam Ash’s sons, Jerome (chairman) and Paul (president); Jerome’s three sons, Sammy (senior vice-president), David (COO), and Richard (CEO).