It’s a truism of family business that the first succession is usually the hardest because the founder never wants to let go, and so it proved for Maton Guitars.
In the late 1980s, Bill May was over 70 and the former woodwork teacher had been making guitars (May tone = Maton) for more than 40 years. But he had Parkinson’s disease and his shaking hands meant he could no longer operate the machines and make guitars, and his wife Vera was at him to retire.
But when his daughter Linda Kitchen and her husband Neville bought the business from him in 1989, he was distraught, heart-broken.
Bill had created a wonderful, iconic Australian brand, had made instruments for many great guitarists, and now could look forward to a comfortable retirement because, although Linda and Neville only paid $75,000 for the business, as well as taking on the $100,000 overdraft, he and Vera had separately sold the property for $1 million. But still, Bill was bereft; for four decades Maton Guitars had monopolised his life, and his family’s.
He was still coming into the business every day until the day he sold it. Next day, he was at home, wondering what to do with himself.
After Bill’s brother and 50 per cent partner, Reg, died in the early 1960s, Bill and Vera had bought out his family so they had owned 100 per cent for 25 years. They had two children: the eldest, Susan, became a classical guitarist and music teacher while Linda went into the family business with her husband and ended up buying it.
Now retirement is in sight for Linda and Neville and they are starting to think about the next succession. But so far that’s all they’ve done – think about it. They aren’t entirely sure yet what to do, and it doesn’t seem all that urgent.
Linda Kitchen is now joint managing director of Maton guitars with her husband, Neville
They have four children and the husband of the eldest is general manager of the company, which means they will soon face the dilemma of many family companies: what happens when only one of your children’s families is directly involved in the business? Do they inherit more of it? Or will Tristana and David do what Linda and Neville did, and buy the business?
It would cost quite a bit more than $75,000 if they did. Under Linda and Neville’s leadership, Maton Guitars has grown from less than $500,000 in sales per year to about $8 million and makes a healthy profit. If anything the strength of the brand has grown since Bill May died in 1993 (as it happens, that was the same year I acquired my second Maton guitar, a fine Queensland maple acoustic).
Like a lot of Australian manufacturers, Maton Guitars has been tossed around over the years by falling tariffs and rising exchange rates, and like many is trying to build exports to supplement sales – with some success.
When Linda and Neville took over, Bill was producing 30 different models, some with production runs of less than 10, so the first thing they did was focus on one product line: the acoustic/electric guitar.
They also invested in machinery. “When we borrowed the money to buy the business, we thought that was it, but it was just the beginning of the investment. There are always new and better ways of doing things.”
The Maton factory in Melbourne's Box Hill
Last year when Allans Music stores closed and took out 20 per cent of turnover, they decided to move into the Chinese market and as a result have now built exports to 30 per cent of output, with 50 per cent as the goal.
But they don’t want to follow the big American guitar brands into manufacturing in China. “Bigger isn’t necessarily better,” says Linda. “I’m proud of selling our Australian-made guitars in China, but we’ll never make them there.”
Tariffs are a constant sore point for the owners of Maton Guitars. When Bill started the business in 1946, there was a 25 per cent tariff on imported guitars, which made his business possible.
In the 1970s that was cut by a quarter and then in the 1980s it was cut again to 5 per cent. The tariff into China is 20 per cent and into some other countries it’s even more – including those with which we have a free trade agreement.
Despite that, and a dollar that’s stubbornly high, Maton Guitars is a successful local manufacturing business because the guitars are nice to play and sound very good – as they have for nearly 70 years. That’s what manufacturing is all about; the rest is just noise.
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