Audio Research in Receivership.

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https://www.audioshark.org/audio-research-corporation-arc-36/future-audio-research-21912.html?highlight=future+audio+research

Re: The Future of Audio Research

Hello, everyone. This is my first Audioshark post because I want to make everyone aware of what is going on at Audio Research. Some of you know me because I was hired by Bill Johnson in 1989. I left for a few years (Thiel), and returned to ARC in 1996. 

Audio Research voluntarily agreed to assign its assets to a receiver, Lighthouse Management Group, Inc, on April 4th. I want you to understand what that means and how it affects our daily operations.

Audio Research has been operating since the assignment was filed almost four weeks ago, which was ten days before the AXPONA, show where our VP of Sales (Allan Haggar) worked with our dealer Quintessence Audio, which featured a statement system including Ref10, RefPhono10, and Ref160M MkII amps. 

Little has changed outwardly. Audio Research remains staffed with Greg and Evan answering questions and assisting owners via email and on the phone; the service department continues repairing products; production is building new products and performing updates; our parts inventory has been good and we continue to receive parts shipments; our sales department continues to accept product orders, and our shipping department is shipping parts and product orders along with completed service units. 

Trent Suggs was relieved of control of Audio Research and we have been working with individuals to purchase the company: we expect to have a new owner very soon. There will be continuity as production, engineering, purchasing, service, and critical personnel will remain working for Audio Research. Including Warren Gehl. 

Operating a dedicated, high performance audio electronics manufacturer is more difficult than you might imagine, particularly given the increasing cost of doing business because of parts shortages, continuation engineering, shipping costs, inflation, and so many other things. Audio Research continues to build every product by hand, including hand-soldering components, creating their meter assemblies using local suppliers, and supporting products more than 50 years old. After each piece is completed, it is bench tested, burned in for 24-48 hours, bench tested again, and auditioned in a reference system to make sure it sounds right before being packed. And, every service piece is auditioned, too. It is an exhaustive process. If any of you are around Minneapolis, schedule an appointment to see how we do it.

Too many products, many overpriced. $10,000 for a preamp that weighs in at twelve pounds is hard to rationalize. I had an LS-28 in my system for a while and although it was nice, it was not great, didn’t seem that well made and the new styling wasn’t for me.

But I wish them well and am sure they will make a comeback.

Years ago I schlepped my "original series" Schiit Freya to a gathering of some audio geek friends to compare it to other stuff including a couple of ARC preamps...I still use the Freya as my main preamp. Does Schiit know something ARC doesn't? You bet they do.

William Z. Johnson who was the visionary died in December 2011. If you recall we were still in reeling from the 2008-09 crash and high end stereo sales were way down- Hifi shops were closing all over the country. Johnson sold the company in 2008 to FineSounds SpA (Sonus Faber) which later rolled up into McIntosh Group in 2016. In August 2020 Trent Suggs who was a sales manager bought the struggling company (Nobody seems to know where he got the money). I was told Suggs was a WZ Johnson fan boy who wanted to get the old cooperate culture back that the suits destroyed. The damage to the morale but not the brand was done. The plan for rebuilding the clubby atmosphere and bringing top grade products to market was disrupted by COVID supply chain disruptions, then insane input costs (+400% in some cases)  and lack of capital 

Take the M320 for example. That amp was supposed to hit the market last year- now it's not even on the website. 

Massive cost increases, playing catch up, and underfunding all contributed to this receivership.  Now there will be a struggle for who gets to own ARC. 

Personally I don' think it will vanish- the brand is too valuable. Here's to hoping that a real HiFi man will buy it and love it and tenderly care for it like William Z did. It is an American icon and needs to be saved. 

Kodac wrote: ARC designs are compromised and not state of the art. Overpriced for what you get. See video for the anatomy of their flagship mono blocks.

• https://www.youtube.com/watch?v=PR-ry-DFdeo

OCD Guy /11Stereo Atlanta is a NAT dealer. Upstart rival. You always pick a fight with the biggest kid when you want to make a name for yourself. 

What I am buying when I buy ARC gear is proven research converted into field tested technology. Nobody has the power transformer technology ARC has. It's proprietary and as my repairman says  "has some magic in it".  Anybody can build a frame, buy some good quality caps, resistors, tubes, etc. and solder them together.. But what combo creates what voice? There is where the years and years of laboratory work pay off. 

I agree that the Ref 750s were overpriced at retail. So what? Buy a used set for $15K. They are readily available and flat out awesome if you like clean volume. Moreover they weren't priced for poor guys. Really wealthy men don't flinch at 85K for amps. I have a friend who puts $26,000 of diesel in his 170' boat for a Saturday cruise to Charleston for dinner and back. That's not counting the crew of 4, the fine wine he serves, the boat itself, the insurance, maintenance etc. It's an $85,000 Saturday- which is no big deal to him. There are LOTS of guys with that kind of bank. More than you can imagine.  

You get the point: Cost of luxury goods are relative to the will of the spender. ARC sold a blue Jillion of those Ref 750s. Ditto the Ref 600s, and the latest (10 years old now) Ref 250s. 70% of their sales were overseas! You can get a Ref 75 for 4K, a Ref 250 for 10K, and a ref 750 for 15K pretty easily these days. Add a Ref 5SE and you have the core of a system that will rival almost anything sold today- for very little money. 

This begs a question: Why is resale so low compared to original MSRP?  The answer may surprise you.  Rich men don't spend much time quibbling over rounding errors when they trade in or trade up. Most of the truly wealthy guys I know call up their dealer and say "come get my LS 460 and bring me an LS 500L in the morning" They don't trot out with their calculator and checkbook haggling like an rug merchant at at bazaar. The bill goes to their family office and gets examined, verified and paid. If the dealer gouges him his office manager calls them up and explains that if this isn't fixed Daddy Warbucks and all his 300 golfing, sailing, club buddies will never buy from Mr. Greedydealer again. Presto! the invoice changes. Big Daddy's golf outing isn't interrupted so he's happy, the family office gang is proud of protecting the cash well, and the dealer has some used equipment to move for quick cash.