Pulling the Strings

It is not that common for a Long Island business owner to be asked for his autograph. It is also uncommon for the likes of Liz Phair or George Clinton to stop by a company’s headquarters to tape an endorsement. But D’Addario & Company is not a common business.

D’Addario is one of the world’s leading designers, manufacturers and distributors of strings for fretted and bowed instruments, drumheads, drum practice pads and guitar and woodwind accessories, including guitar straps and cables. Jim D’Addario, chairman and CEO of D’Addario & Company, was born in 1950 into a family that has been making instrument strings since the 17th century in Salle, Italy. Jim got started in the trade when he was a boy growing up in Astoria, Queens. His family eventually moved to Long Island, and in 1959, his father and older brother John opened Darco Strings. In 1963, Darco was purchased by C.F. Martin and Company, a leading guitar maker, and Jim’s father and brother remained with Martin’s Darco string division. By 1969, Jim was a student at Hofstra University, majoring in music. In addition to giving guitar lessons, he also worked as a part-time string salesman for Martin. He covered the New York metropolitan area, including all five boroughs, a portion of New Jersey and an area in upstate New York. While he was paid only $10 per store visit and never made a commission, D’Addario learned firsthand about the retail side of the string business.

D’Addario left Martin in 1973 and founded the string manufacturing company that he and his family still own today. The company is considered the gold standard of strings — both fretted and bowed. In fact, the company has a musicians’ advisory board whose members are recruited to give feedback and opinions during the research and development stage of new products.

The company has moved well beyond just guitar strings. In the 1980s, D’Addario acquired Kaplan Musical Strings and expanded to include orchestral strings. The company has also acquired several other proprietary brands: Planet Waves (musical instrument accessories, such as guitar straps), Evans Drumheads, HQ (drum practice pads and cymbal mutes) and Rico (reeds). They also manufacture private-label strings for many other companies (the names of which were not given, even off the record). D’Addario continues to manufacture 87% of its products in the United States. It has manufacturing facilities in Farmingdale, N.Y., and Sun Valley, Calif., and handles its own distribution in more than 100 countries around the world.

Editor-in-Chief Robert Levin sat down with Jim D’Addario to discuss manufacturing in the U.S., daily root cause analysis and jamming at the company holiday party.

The Early Days

RL: You had a fair degree of success very early. Obviously, you had a lot of experience with the product, but what other factors got your company off the ground?

JD: Because of the transaction between Darco and Martin, we had stock in the Martin company and no money. We were literally broke. We borrowed about $25,000 and we ordered some machinery. My father’s only assets were the stock and his house; however, my father and my grandfather had tremendous reputations in the industry for being honorable people and always paying bills, and on time. In fact, my father used to pay invoices as soon as he got them and did not wait 30 days when he was running Darco. When we ordered wire and materials from the suppliers that we’d been dealing with for years, some of these companies my grandfather dealt with for 70 years said, “Don’t worry about paying for it; we know you’ll pay for it when you can.” One company in particular, Hudson Wire Company, gave us credit for two years. They knew we were going to pay them, and they wanted to help us because of my dad’s reputation. Starting up without having to borrow a lot of money was definitely a driver of our early success.

My father’s reputation for making a quality product helped as well. Initially, we didn’t sell D’Addario strings; we primarily made private labels. That’s what fed us while we built our brand. And I think that reputation was a key to getting those private-label deals.

By 1975 or 1976, we started to develop the expertise to make our own machinery or modify the machinery we purchased to make it better. This “vertical integration” is something that I’ve always pushed early on for a company even this [small] size, and it was a big advantage for us.

RL: What did vertical integration mean for your business in the early days?

JD: I will give you an example. Packaging and marketing were very important to the success of the D’Addario brand we were trying to build. My wife was a graphic artist and I did a lot of graphic art myself, and the two of us were able to do all our own art production, advertising and copywriting, and we printed the packaging. By vertically integrating our own ad agency and our own print shop, we were able to control our costs. We were able to do two or three times as much production and creative with the same amount of money than if we had hired a traditional agency.