STG closes Mac Baren and Sutliff

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Jan 28, 2018
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Sarasota, FL
I am not fond of Mac Baren or Sutliff but this is sad news, especially for the people potentially losing their jobs. I can't help but reflect on what seems to be younger generations taking the money to live the life rather than perpetuating a multi-generational, proud, family business.
Or, people who realize the long term outlook for pipe tobacco companies isn't promising. Grab the money and get out while the getting is good.
 
Grab the money and get out while the getting is good.
They just took over MacBaren five months ago. It's not like they were dragging around a deadbeat company that was dragging them down. They literally just bought these companies and immediately started killing it off. Why wouldn't they have had a long-term negative outlook back in July?
Basically what it amounts to is that they want to kill off all competition and be the only game in the EU. Basically, they are flipping off all pipesmokers, knowing that in the EU they will soon be the only game in town.
 

Snook

Starting to Get Obsessed
Oct 2, 2019
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Idaho
They just took over MacBaren five months ago. It's not like they were dragging around a deadbeat company that was dragging them down. They literally just bought these companies and immediately started killing it off. Why wouldn't they have had a long-term negative outlook back in July?
Basically what it amounts to is that they want to kill off all competition and be the only game in the EU. Basically, they are flipping off all pipesmokers, knowing that in the EU they will soon be the only game in town.
What I don't understand is how shuttering these entities benefits them. Aren't Sutliff and Mac Baren both highly popular and profitable brands? Wouldn't the acquisition itself have eliminated competition and increased value to shareholders, if that's what they're after?
 
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Warlee

Might Stick Around
Apr 13, 2022
81
674
Michigan
What I don't understand is how shuttering these entities benefits them. Aren't Sutliff and Mac Baren both highly popular and profitable brands? Wouldn't the acquisition itself have eliminated competition and increased value to shareholders, if that's what they're after?
Acquisition is all about extracting profit. It’s not about if the business is profitable, it’s about how much more money they can make above that by milking the brand. If they can acquire it, cut cost substantially by closing factories and streamlining the product offerings to just the most profitable brands, they will make huge amounts of money. It doesn’t matter if product quality plummets and the brand eventually fizzles out. It will take most people awhile to catch on but they will have made their money by then.

I’m not sure if that is their plan exactly. One should look at what they have done with acquisitions in the past I suppose.
 

jpmcwjr

Moderator
Staff member
May 12, 2015
26,221
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Carmel Valley, CA
Translation; become more efficient, profitable, and lower quality and character…
Yes, prevalent perhaps, but not all companies do that.

P.S. Please put your location in your Profile!

How: Under your avatar, (top right, left most of three symbols) you choose "Account Details", which brings up "My Account". "My Location" is halfway down.
 

swan

Lurker
Dec 9, 2018
27
43
NYC
What I don't understand is how shuttering these entities benefits them. Aren't Sutliff and Mac Baren both highly popular and profitable brands? Wouldn't the acquisition itself have eliminated competition and increased value to shareholders, if that's what they're after?

They are not killing off the brands, they are simply looking for synergies to optimize production and increase profits.
At the moment they are having a lot of duplicates (like finance, logistics, hr etc) and on production they can leverage economies of scale by producing as much as possible under the same roof, fully using the machineries and adding some workforce.
That to me is clear in Denmark, it is really less clear about USA though, why the need to shut down Sutliff that is located really far away from Denmark, it serves a different market with a different know how.

Furthermore, MacBaren USA includes:
tobaccopipes.com
cupojoes.com
tobaccoreviews.com
what will happen to those entities?
And Sutliff manufactures for many B&M but also for more well known brands like Peretti and Seattle Pipe Club, probably more.
What will happen to them??? Will Danish-made Seattle Pipe Club or Peretti be the same?
 

Pipke

Can't Leave
Aug 3, 2024
301
882
East of Cleveland, Ohio. USA
Where did you see that about the US facilities? It is not in the article you posted.
Near the end of the article:
The first consequence of the acquisition will be the dismissal of the management team, which will take place within the next eight to ten days. However, it is not only the factory in Svendborg that is affected by STG's new strategy. Mac Baren facilities in the US will also be closed as part of the restructuring.
Now that I read it again, the article does not say ALL Mac Baren facilities in the US will also be closed. But the article was a interview summary, and I'd caution against reading too much between the lines in an effort to extract more than what was presented.
 
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