BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

The Difference Between Televisions And Pianos

Market Movers

by Felix Salmon
Main
Ecuador Own-Goal Datapoint of the Day   Madoff's Trading Statements

Recent Blog Posts

Links

Dec 15 2008 5:15pm EDT

The Difference Between Televisions and Pianos

Costco sells televisions. Here's what its CFO had to say on the subject of recent sales, as reported by Jeff Matthews:

Our television sales have been way up in November.... [W]e had unit sales up over 50% in the four weeks, but that translated into a dollar sales increase of only 3%.

Steinway, on the other hand, sells pianos:

For the first nine months of 2008, Steinway said piano revenues increased 5%. Steinway grand unit shipments declined 6% and mid-priced piano unit shipments decreased 2%.

Clearly Steinway has much more pricing power than Costco. But which of these two companies is better positioned for recession? Costco stock is down 24% year-to-date; Steinway, which trades under the rather-too-cutesy ticker symbol LVB, is down 39%.

Makes sense to me. People spend money at Steinway; they save it at Costco. Which makes Costco's prospects rather healthier than Steinway's.

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.


Connect With Portfolio.com
Like Portfolio on Facebook

Come on, like us—you know you want to.

Follow Portfolio on Twitter

Follow us and if you're an innovative entrepreneur, we'll return the favor.

The Mix

Today's top stories, conversation starters, and the back nine business bites.

spotlight on

People & Ideas

Whisky To-Go-Go

Now there's a company that let's you taste your knowledge of fine blended Scotches by mixing a whisky of your own. Read More