Classic Japanese audio brand Onkyo finally files for bankruptcy

Last year, I wrote about how Sound United planned to take over the businesses of Japanese audio brands Onkyo and Pioneer. The deal fell through for some reason and now news is coming in from Japan that might explain why the sale didn’t go through.

According to Nikkei Asia, Onkyo Home Entertainment filed for bankruptcy yesterday in the Osaka District Court. Total liabilities were reported to be approximately 3.1 billion yen, or approximately $24 million. The company is based in Osaka and was delisted in August.

The company’s failure has been blamed on its inability to adapt to the rapidly changing audio market which is increasingly software-based and revolves around streaming music rather than listening to it on formats. physical like CDs. More of us are using our smartphones to listen to music and even watch movies.

The two Onkyo subsidiaries that handled the manufacture of loudspeakers and other equipment for third parties had already filed for voluntary bankruptcy in March this year.

Since then, Onkyo has ceased its functions. The company told Nikkei that it “tried to maintain its operations on a smaller scale but could not prevent its cash flow problems from getting worse.”

The highly revered Onkyo brand enjoys a strong reputation among audiophiles and was founded in 1946. In its heyday, the company was well known for its range of amplifiers, CD players, tuners, AV receivers and audio systems. all-in-one audio. However, with the shift to music consumption on smartphones and the shift to multi-room audio systems, the company has seen a steady decline in revenue.

In January 2021, when Onkyo first raised the possibility of delisting, shareholders gave the green light to a plan to grant stock options to an investment fund in the islands. Cayman Islands to raise up to 6.2 billion yen in new equity. However, not all stock options were exercised by the company’s fiscal year-end in March 2022. This failure triggered Onkyo’s delisting from the Tokyo Stock Exchange.

Onkyo has entrusted its consumer audiovisual business to Sharp and the American company Voxx International. It also managed to sell its helmet business to an investment fund in September. The Sharp and Voxx agreement will continue to develop products using the Onkyo brand.

It’s always sad to see a venerable brand go bankrupt, but it’s a sign that the consumer audio market is changing. Many Japanese brands seem to lack the software skills and interface design capabilities to adapt to the new era of streaming. US-based companies seem to be better at this aspect of the business.