At D’Addario & Co., a Farmingdale-based manufacturer of guitar strings and other musical accessories, executives are whistling a happy tune these days.
Sales have risen comfortably, the company has expanded into new spaces, and its charitable foundation is flourishing. But there are some sour notes out there that keep John D’Addario III, the company’s president and son of its former chief executive, awake at night.
“But it’s like whack-a-mole,” the energetic D’Addario, who became president four years ago, says during an interview in his office. “Things just keep popping up.”
One of the biggest headaches, D’Addario says, is rampant counterfeiting. Several years ago, D’Addario’s father, Jim, then the CEO, identified China as the main culprit in schemes that damaged the company’s reputation. The quality of the counterfeit strings was incredibly poor, Jim D’Addario says. In most cases, Chinese string manufacturers make low-quality strings, and copy D’Addario’s packaging.
A second major issue is the tariff war between the U.S. and China. When President Donald Trump in March imposed sharp tariffs on China, the Chinese responded. The Chinese response has negatively impacted D’Addario, because its strings make use of steel.
And, while D’Addario is growing, it may not be able to continue to add to its employee base, which stands at about 800 on Long Island now, most of them in manufacturing. That’s because of minimum wage rates, which are expected to rise to $15 an hour on January 1, 2020. D’Addario says the company may even have to reduce staff.
The company has enlisted the support of members of Congress to help in its war against counterfeiters, who D’Addario said now include several other Pacific-Asian nations, including Vietnam and Indonesia. The company is also looking for ways to maintain employee growth and deal with tariffs.
The U.S. government, and some Chinese leaders, say they are trying to crack down on counterfeiters. But Secretary of State Mike Pompeo recently told a business group in Iowa that Chinese counterfeit goods and products “remain persistent problems.”
D’Addario has a long and prestigious history in the music business and on LI, where it operates the D’Addario Foundation, which helps students, many in struggling areas, receive musical instruction. It also raised $45,000 from its Music Education for Girls Initiative on International Women’s Day in March. The Initiative provides resources and guidance for young women to study music. The foundation says young women have been “vastly underrepresented in the music industry.”
The foundation has been the driving force behind the Ascenté Chamber Orchestra in the Copiague School District, where students receive private lessons.
The company traces its roots back to the late 1600s. The D’Addario family of string-makers was based in the small Italian town of Salle. But a massive earthquake devastated the town in 1905, and two brothers-in-law, Rocco and Carmine D’Addario came to Astoria, Queens to continue their business. They opened a small string shop behind their family home.
New popular music in the 20th century made guitars highly popular. In 1974, the company decided to make strings under its own name, after a brief partnership with another company, Martin Guitars.
D’Addario’s sales are about $180 million a year, up from about $120 million a decade ago. The privately held company does not release its net income. It has about 1,200 employees worldwide, with operations in Europe. It also produces cables, earplugs, electronic tuners, picks, drumheads, drumsticks, and reeds for woodwind instruments.
John D’Addario recalls being 7 years old when he first visited the company, with his father, Jim. After working for a few years in the cosmetics industry, he began working full time for the company in 1996.
“We’re going to innovate new products,” D’Addario says. “The company is devising ways to keep abreast of the digital music business, and it is also looking to open more overseas offices, particularly in the Pacific-Asia region, even though much counterfeiting takes place there.”
Nonetheless, D’Addario says, “By 2030, two-thirds of spending by the middle class will come from the Pacific-Asia region. I see massive opportunities there.”
