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matchless letter from mark sampson

8/31/2000 1:07 PM
matchless letter from mark sampson  
maybe this letter sheds a little light on why the matchless flame went out, the story has never been explaind really well to me, well here's the story from the man!  
Edit by tboy: The link above has gone dead so I'm including the text of the letter below:  
former president, Matchless LLC  
Currently there is a lot of rumor, innuendos, half truths, and just plain old lies being circulated about the current state of Matchless, my involvement, and the reasons for its current state. The purpose of this letter is to clear the air and set the record straight.  
I will attempt to do this through a brief history/timeline of the facts that led up to the closure of the company. Matchless was at its peak in mid 1997. It was at this time that our lease had expired. The decision was made by the partners of Matchless to purchase the building in Pico Rivera, rather than pay rent. We moved the factory in late June/ July. The move was expensive. Within 60 days of the move, our biggest customer, a Japanese distributor, cancelled all orders due to the crash of the Yen. This meant we had lost our biggest cash customer overnight, with no warning and no hope of finding another due to the situation in Japan. This was the end of August/first of September 1997. By October, {within another 60 days}, the value of the dollar was so strong that we [were] no longer able to sell any significant quantity of product overseas, At this time this meant we had lost approximately 50% of our sale in a 90-120 day time frame of moving. We attempted to correct this situation by focusing our attention on U.S. sales. Due to the timing though our efforts were unsuccessful. This was because spring time is the big time for amp sales. We struggled through and thought we were going to be able to turn the company in the spring. Come spring time though we were faced with the consequences of a lawsuit by a former employee, the details of which I am not at liberty to disclose. It is sufficient to say that the cost of this would be the final nails in the Matchless coffin. It was shortly before this point that I began asking for help from my partners. Matchless laid off employees in May due to its inability to meet payroll and other obligations. There was a partial callback of key employees in June and July. The overhead was such that at this point in time the company would not be able to recover. In June my partners sent a manager down to the factory to help. I did not know it at the time but she later informed me that she was sent with instructions to take over. By September 1998 she had taken complete control of the business including all check-writing approval. This left me in the awkward spot of having the liability of controlling authority but without the muscle of the checkbook and managerial ability. It was for this reason and the promise of an infusion of much needed capitol that on October 22nd 1998 I signed over controlling interest in the company that I founded with Rick Perotta in May of 1989. I relinquished financial control in an attempt to save the company, and get all the creditors paid. None of which happened. I stayed on attempting to help manage Matchless but without the capital needed to buy parts we were unable to build many further units. Money was spent on overhead but not enough parts were purchased to allow the operations to be successful in turning the company around. When I saw how the situation was going, coupled with the increase in tensions between my partners and myself, by mutual agreement I resigned and turned over my keys to the facility on or about January 5th 1999. I stayed available as a paid phone consultant for a small fee until sometime around the first week of March 1999. It was about this time {first week of March} when my partners decided to shut down the operations. Somehow during the period between January and March the electricity way shut off due to non payment of the bill. This was a very unfortunate set of circumstances due to the fact that the computers were always on so that my partner's management staff could modem in and work on the financial data. When the electricity was turned back on all of the data became scrambled. The data recovery was unsuccessful. Consequently much of the financial data has been lost or so I have been told. There has never been any attempt by me to hide any data, I have nothing to hide. All of the information in this letter can be corroborated by the former employees for those interested. Sometime in mid April of 1999 I had my last meaningful phone call from my sctiior partner. There was a very brief call in June of 1999 only to reaffirm our October 22nd 1998 agreement. I remained at the same address and phone number for a year hoping that he would put Matchless back together. However it was just not to be. I was forced to move in April of 2000. When I was forccd to move after nearly a year of waiting I gave up hope on Matchless being put back together. I tried my best to fix the situation. but my best was not good enough. I hope all of the Matchless Owners, Dealers and Vendors will accept my deepest, most sincere, heartfelt apologies. To all of you: Good Tones, and have fun in the future.  
Mark Sampson"
9/4/2000 2:42 PM
Randy Jamz

Wow. An eerily similar story related to me by old man Garnet. Garnet made the Gibson amplifiers during the 1970s and when a big multi-million dollar order 'fell through' (the new owners of Gibson decided no more amplifiers for them!) the cause and effect chain reaction made Garnet close shop. Let this be a lesson to us all; don't bank on one big order to make or break you. It'll probably break you in the end.
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9/5/2000 12:51 PM
andy fuchs

A similar frightening experience happened to me. I was manufacturing tube hi-end audio equipment, and went to a CES (The NAMM of the Audio business). I wrote a boatload of orders for overseas shipment, and the exhange rate changed so extreme that it would have practically cost more to make the products than sell them. I closed up shop as a result. af
9/5/2000 5:53 PM

Its a shame when we as Americans try to build our dream of owning a company and working very hard to make this dream a reality only to have an overseas order fall through and cause a company to shut down. It seems our goverment is always willing to help these other countries and never seem to get the money back later after these countries stabilize their economy but right here in America we suffer because we cannot depend on our own goverment to help in assistance to keep our small business from going under when they do look after the (BIG CORPORATE COMPANIES) with the BIG tax breaks. It seems that there is no fairness to this madness in America. I am not trying to start flame wars because I do very much love my country, but is seems that the small business owners do need help some times and our goverment should pitch in a little in needed times to keep our dream alive. Can I get an AMEN.  
Brother Mitch...
9/5/2000 6:10 PM

I second that call for salvation Mitch, Amen from me :)  
On the Ship Channel I do better when exports are in style than imports, I just wish the styles wouldn't change as easily as they do . . .  
9/5/2000 6:36 PM
Carl Z

You won't get an amen from me...sorry. The reality of the situation is that the Matchless company screwed up bad. Never EVER make that large a commitment to one buyer. The global economy is too volatile to do this. As for the corporate bad guys they don't get all that many tax breaks. They're paying something in the neighborhood of 40% of their income to uncle sam. That's a big chunk of change. You also need to remember that these evil corporations are employing a massive percentage of the population. Think what would happen if say Phillip Morris closed their doors due to the anti-smoking push. They would put several hundred thousand people out of work directly. The tobacco farmers would be going broke. The shipping companies would lose millions of dollars. Then figure in the physical paper consumed, the advertising dollars, the secondary goods consumed by the company to actually manufacture the cigarettes, etc. In total I suspect it'd cost the nation a good hundred billion dollars in GNP from that company alone. Now add in the loss of income that would slow housing starts, durable goods and general spending reductions by all the people that are out of work or have substantially reduced wages. It would drive us into a massive depression the likes of which we've never seen. That's just one company! The big coprorations are NOT the bad guy. They're the ones driving this economy and allowing a standard of living that is unprecedented in the world.  
Next thing is that the United States is based on capatalism not socialism. The US tax structure is set up to motivate small business and entrepreneurs. The write offs the small businesman can get are staggering! Also the job of the government isn't bailing out inept businesses with unsound plans. The reason people go into business for themselves is to get out from under the government thumb and the mid-management boss that's on an ego trip. If you can't hold your own and run with the big dogs you're going to get left behind and eaten up by the people that can. It's that simple.  
Ok, that's my republican speech for the day. :D  
Carl Z
9/5/2000 10:42 PM
Aaron V.

"a standard of living that is unprecedented in the world.  
I don't want to step into the American pride thing that seems to be starting here... but these days Canada enjoys the highest standard of living.  
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