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Asian Crisis Squelches Flute Market

Music: U.S. suppliers are hit hard as South Koreans stop buying the expensive instruments.

November 16, 1998|ALISON FITZGERALD | ASSOCIATED PRESS

BOSTON — When you listen to the sweet trill of a flute, global economics doesn't immediately come to mind.

But the few companies that make custom flutes for serious music students and elite orchestra players are feeling the pinch of the Asian financial crisis. In fact, they say it feels more like a vise grip.

"In this little niche world, we all are having a little bit of a wake-up call," said Lillian Burkart of Burkart-Phelan in Acton.

Last fall, Burkart sold a gold flute to Song Ha, an influential South Korean flute teacher who had referred several of her students to the company.

"That was the last flute to go into Korea, period," Burkart said.

Soon after, a South Korean flute soloist canceled his order for a custom flute, and the free fall began, Burkart said.

The financial problems in Asia--particularly in South Korea--have sent sales of custom-made flutes plummeting.

The handmade-flute industry is made up of small companies located almost exclusively in and around Boston.

The industry got started in Massachusetts nearly a century ago, when a soaring interest in music generated by the Boston Symphony Orchestra combined with a strong precious-metals industry.

The companies that sell these exclusive instruments thrive on sales of just a small number of very expensive flutes each year. They range in price from about $8,000 for a handmade, sterling-silver flute to nearly $30,000 for one in platinum. The instruments are expected to last a lifetime.

Burkart-Phelan is a tiny business, even in relation to the other small companies in the area that make up the handmade flute industry. Burkart said her company, based in Acton, sells only about 50 handmade silver, gold or platinum flutes each year.

Brannen Brothers Flutemakers of Woburn sells about 1,000 each year. Jim Keefe, the company's vice president and general manager, said his company has seen its sales fall about 30% this year, mostly because the South Korean market has dried up.

The flute market in South Korea had blossomed in the decade before the crisis hit.

"It was to the point that every master class in this country had a Korean woman playing a gold flute," Keefe said.

Then the Asian troubles began, and his company hadn't sent a flute to South Korea all year.

The economics, in some ways, are simple. A flute that retails for $15,000 in the United States would see a series of markups before ever entering South Korea. There is a dealer markup of 15% to 30%, import duties that approach 25%, and shipping tariffs. With the currency free fall in the last year, the real cost has nearly doubled.

"The player a year ago would be paying about $28,000 to $30,000 for a $15,000 instrument," Burkart said. "Now, with the currency being what it is, that flute is entirely unapproachable."

John Cho, who imports instruments into South Korea for Cosmos Corp., said he hadn't imported any flutes this year.

"The customers are very, very, extremely reluctant to spend their money because they're not certain what their future will be like," he said.

The flutemakers for years relied mostly on reputation and word-of-mouth to sell instruments, but the recent downturn has led them to search for new markets.

"We're doing more marketing in the states and doing more with our dealers in Europe," said Keefe, of Brannen Brothers. "We're also working on a lower-priced instrument--still a handmade offering, but in the $6,500 range."

Burkart said her company also is looking at other markets, especially in South America and South Africa.

But the flutemakers agree it will be difficult to find a single market where so many people will be willing to hand over tens of thousands of dollars to play beautiful music on a beautiful instrument.

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