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Celestron News 28 May 2002: Tasco Worldwide began the process of liquidating
Privately owned Tasco Worldwide based in Miramar, Florida began the process of liquidating on Tuesday 28 May 2002 after failing to service debts to its secured lenders. Tasco was founded in 1954 by George Rosenfield as the Tanross Supply Company, a wholesale fishing tackle and hardware distributorship. As the company expanded its inventory to include binoculars, its name was shortened to Tasco. Tasco became one of the major distributors of telescopes which target the first time telescope buyer in astronomy, although Tasco had grown into other sales areas including terrestrial spotting telescopes and binoculars.
By 1995 Tasco had grown and prospered, and in March 1996 the founder Mr. George Rosenfield sold the business. By then Tasco employed 160 people in Miami-Dade County, Florida and maintained a location in the state of Washington. The annual sales by Tasco in 1995 to 1996 was about $110 million. Tasco came to the attention of the advanced amateur astronomy community when in June 1998 it acquired Celestron International from Diethelm a Swiss owned corporation.
Like many other manufacturers, Tasco saw sales increasing and in 1997 management decided to take measures consistent with long term growth which included a move in 1997 to a 48,000 square foot facility from Miami to Miramar, Florida. However, by 2001 Tasco went into default with its secured lenders, a facility which now stands at about $30 million. Tasco hired Miami, Florida accountant James S. Feltman to manage the firm's assets and to represent creditors interests during the course of the liquidation. The liquidation of Tasco will be overseen by the Broward County Circuit Court.
Back to Tasco and Celestron
With Tasco on the way out, our concerns lies with the future of Celestron International which is an asset of Tasco that will likely be sold. Company Seven believes there is a good probability that something about the future of Celestron will be decided within about thirty days.
We would like to see someone put in charge of Celestron who is a credible individual with a good engineering background, and with high ideals that used to be exhibited by Celestron in their earlier days. But in this age of putting "return on investment" over many traditional concerns - we are no more than guardedly optimistic.
Company Seven does not believe it will be in the interest of the consumer to have Celestron acquired by their most capable competitor - Meade Instruments, Corp. And so we have gone so far as to express our opinion and present facts of the innovation, and behaviors of both Celestron and Meade over the past twenty years or so to the U.S. Federal Trade Commission. This resulted on 29 May 2002 with the U.S. Federal Trade Commission seeking a temporary restraining order and a preliminary injunction in federal district court to pre-empt any attempt by Meade to purchase all, or certain assets, of Tasco Holdings, Inc.'s Celestron Internationals. According to the FTC's complaint, an acquisition by Meade of Celestron assets would impact adversely the performance telescope market by eliminating substantial actual competition between the two companies, and by creating a monopoly in the market for Schmidt-Cassegrain telescopes.
Symptoms of What Went Wrong
A Tasco telescope of the 1960's could have been a relatively well made telescope coming from Japan. This would be the telescope to get many people into the hobby, and keep them in the hobby for a good time. Constructed mostly of metal components, with decent quality anti-reflect ion coated objectives and eyepieces, on a mount that might have been adequate, often furnished in a nicely fitted wood case! However, the quality and performance of Tasco astronomical telescopes (as those of other distributors of amateur telescopes gradually to include several products by Celestron and Meade Instruments) declined in quality as each competitor worked to cheapen their products to appeal to the lowest common taste of the often relatively impulsive first time telescope buyer, and the demands of common mass merchandisers.
More and more outrageous performance claims were made for poorer and less capable products coming to the market over the years. By the time of Comet Halley's last visit, the capabilities and quality of many department store astronomical telescopes including those by Tasco came to be considered by many experienced amateur astronomers as the stereotype of what was wrong with amateur telescopes. Articles began to appear in books such as Nightwatch where the author Terry Dickinson writes the "Trash Scope Blues" article criticizing the poor quality telescopes marketed to amateurs. Company Seven certainly was in the fore front of criticizing the cheapening and misrepresenting of amateur telescopes, and we published these opinions several places on line at company7.com, and our concern proved the article "Advice for Beginners (or Anyone) Seeking to Buy A Telescope". But the astronomical magazines who should have been among the most knowledgeable, remained hesitant to criticize advertisers or edit their ads content.
Problems in the U.S. Economy Bear Down
After observing several prior years of unprecedented prosperity, and of insupportable growth of demand in the U.S. stock market, Company Seven viewed the U.S. economy as entering some sort of a drop off beginning in about March 2000. The hangover from the partying began when tech stocks tumbled, and reality finally stared to set into the debt ridden, stock heavy consumer. We believed the sales drop offs in the economy would certainly impact sales of unnecessary consumer products including lower quality telescopes. And the astronomy market was just coming of another boon of sales with the most recent spike attributable to the interest in the hobby provoked by the impact of several naked eye comets including the Comet Shoemaker-Levy with Jupiter; this spurred telescope sales much as the visit of Comet Halley had in the mid 1980's.
As we have seen in the past, while our own sales of "Ferrari" like products made by innovative and well regarded companies remain strong even in a recession, we noticed a massive drop in the sales of amateur telescopes of the lower cost varieties - with the exception of several particularly practical telescopes we sell by Orion most notably their XT series including the Skyquest XT-8, and XT-10.
From March 2000 through the Christmas season of 2001 we observed the amateur telescope market experience falling sales. The events of 11 September 2001, and the fluctuation of oil prices and consumer confidence certainly meant the stagnation would continue through at least 2002. And we watched from 2000 on as the major manufacturers suffered more and more unpaid or restructured debt from floundering retailers (several of whom went bankrupt over the recent two years). With these events, as in other industries, several telescope manufacturing and distribution companies values tumbled.
Some of these falls could be observed publicly as in the case of the innovative Meade Instruments Corp. which (like Celestron) sold some good larger telescopes, but then became corrupted by entering into the larger market for department store grade, generally cheaply made telescopes. At about the beginning of year 2000 we read in financial magazines how Meade was one of the fastest growing publicly traded companies in the U.S. According to "quotes.nasdaq.com" the Meade stock value rose from about $10/share to about $40 in value in just a matter of months then splitting 2:1 in June 20, 2000. But after the market crash of 2000 and loss of consumer confidence, the Meade stock had by early year 2002 fallen in value to about $4/share or less, a fraction of their prior stock value and less than it has been valued in any time over the prior three years.
On May 28, 2002 Celestron's Marty Traxler put the following Press Release on the Celestron Web Site:
Torrance, CA - May 28, 2002 - Effective May 28, 2002, Celestron International, a respected designer and manufacturer of telescopes and sport optics products, entered into an assignment of assets for the benefit of creditors. The assignee is in the process of reviewing potential purchase offers for the entire company's assets, including an offer presented by the current Celestron senior management group, which will provide for continuation of Celestron's business and products. Celestron's business continues without a reduction in workforce. According to Joseph A. Lupica Jr., Celestron's Executive Vice President Operations, "It is our intent to ensure that Celestron continues to operate as an independent company. Our senior management group is committed to guiding the Company and maintaining its aggressive new product development initiatives and manufacturing."
Celestron recently introduced two new models in its successful NexStarČ line of computerized GoTo GPS telescopes - the NexStar 5i and 8i. These telescopes represent a strategic move by Celestron to offer customers the ability to purchase highly affordable computerized telescopes with advanced hardware and software features and the ability to upgrade them to full GPS capability if desired with the addition of a 16-channel GPS accessory and upgraded computerized hand control. These new telescopes compliment Celestron's highly acclaimed NexStar 8 GPS and NexStar 11GPS.Š
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