Message from Alan Shaw

[Randy Myers]

I know that the thread about tariffs has rightfully been close. I very much supported this action. I am not trying to start another discussion. I read this message from the owner of Harbeth on their forums, and wanted to share it.

"Companies really do not like economic uncertainty, including this one. How on earth can we plan our procurement and manufacturing in such an environment? This is not an academic issue: we have by far the largest order book in Harbeth's history, and a significant part of that is destined for the USA. To increase production so that we can deliver in a timely manner, we urgently need to expand our production headcount, and to buy or lease additional working and storage space, and this is being examined right now. But should we or not at this uncertain time?

If a manufacturer overestimate future demand, it will be saddled with labour costs, inventory and floor space inappropriate to the lowered demand. If it downsizes in anticipation of falling future demand, it will needlessly cut future income and potentially give away market share to competitors who have read the future differently and have the inventory and staff to supply. It's really a challenge to read the near future, but clearly, we are most certainly not alone. And the very market that has the strongest demand pull also presents the most risk: an unprecedented and worrisome situation. And if we look to another of our major markets, Europe, we face this situation.

What would you do in my shoes?"

Alan Shaw
Designer, owner
Harbeth Audio UK

As a follow up, the new Harbeth models, the XD2 were supposed to be released and available in the USA in early April. It is now the end of May and there is no estimate when and if they will become available. The prices that were previously released for the new models are now unsure and most undoubtedly will be raised.

 

[Randy Myers]

As of this morning, message from Alan Shaw:

"This morning we turned a new page and made a decision. We have such a very large order book for XD2 that we have to expand our production and storage to be able to fulfil global distributor's demand.

My thinking is something like this:

- I cannot believe that the leadership situation we see in the USA will (be allowed to) continue unchecked because the socio-economic consequences of the current direction are so horrendous for the world
- Americans are ultimately rational people and strongly believe in democracy. The present phase will pass
- We have to take advantage of the orders on hand as an opportunity to grow and strengthen our business
- We have already invested substantial cash into pre-paid inventory to fulfil orders, so we are already fully committed
- The XD2 series are really excellent performers, and the future demand will be even stronger. The orders we have on hand are only the starting point
- We have no borrowings, entirely self-funded and there is no third party to justify or explain our plans to, or to challenge our self-confidence (except our auditors who rightly need to know)
- Expansion, given all of the above, is the least risky strategy at this moment. Doing nothing and frightening ourselves would be foolish

A garbage skip has arrived, and every piece part or redundant asset that does not meet our QC standard and is taking up valuable storage space will be binned. We have to utilise every square inch of factory space for production.

Furthermore: tomorrow I will sign a long term contract to double our storage space, taking our total UK inventory to over 300 pallets of parts. This afternoon we will purchase a van to be able to drive to external storage at will.

Alan Shaw
Designer, owner
Harbeth Audio UK"