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Location: Blue Ridge Mountains | Guitar Center goes Kaput!
Just announced...(but it's been coming)...I am trying to get the link up that will work...the server has been down off and on for most of the afternoon...I'll get the link up when it's working...here's the text from the site before it went down...
THE END OF GUITAR CENTER
ERIC GARLAND FEBRUARY 3, 2015 RETAIL
This is an obituary for Guitar Center, a chain of big box musical instrument stores that was captured and infected by private equity during a national trend of greed and reckless expansionism in the late-1990s and early-2000s. The company started as a Los Angeles organ store, became a successful purveyor of guitars after the Beatles arrived in the United States, evolved into a national competitor over a period of decades, and shall finish, with sad poetry, as the symbol of everything dysfunctional about American corporate finance, management, and retail in the modern age. Its demise is really the end of a generation of business managers, illustrating how they lost their moral compass as well as any ability to lead individual companies or national economies into a stable, rational, prosperous future. This story will focus on the final days of this one company, but it is really about our painful transition to an economic system that obeys objective reality and serves people in a durable, holistic manner.
THE ORIGINAL SIN, AND EVENTS LEADING TO COLLAPSE
I have been tracking the evolution of this company for over a year now, and the evidence is incontrovertible: the corporate entity known as Guitar Center, Inc. is in the midst of irreversible collapse dynamics and will cease to hold its position as the industry leader in the short-term. In the mid-term, the company may cease to operate as a going concern and will be reduced to a group of trademarks, service marks and patents that will be sold to a buyer with considerably different plans for the company. Its days as the national industry leader are over.
I shall support my thesis with easily accessible public information, though I also possess considerable insights from industry insiders who prefer not to be named. The idea that this is a doomed entity which can only submerge deeper into dysfunction and, ultimately, oblivion is not widely held. The vast majority of the musical instrument industry exhibits what we intelligence analysts call “normalcy bias,” the attraction to a worldview that things are normal and will remain normal, despite considerable evidence to the contrary. People refer to Guitar Center as “too big to fail,” despite the fact that the firm shares absolutely no characteristics with companies that normally acquire that moniker, such as Citibank, ExxonMobil, or General Electric. They assume that another buyer will emerge to make a simple change of ownership behind the scenes without considering the financial complexities that make such a transaction nearly impossible. Most often, stakeholders in the musical instrument industry assume that the mechanics behind Guitar Center are more complex than they can easily grasp, and so they simple ignore the matter despite its potential impact. As a result, when I visited the NAMM Show in Anaheim, California only days ago, I found that the overwhelming majority of industry figures with whom I spoke spent very little time or energy on the critical analysis of a firm which represents 28% of the industry, a total $2.1 billion out of $7 billion. As a result, we can assume that few people will have contingency plans for potentially disruptive scenarios resulting from Guitar Center’s fate, but that is hardly unprecedented in the history of business. Reality does not need our permission to have its way with our destiny.
Moreover, the media which covers the musical instrument industry is deeply uncritical. Nearly everything I have read regarding the current situation has been either a regurgitation of corporate press releases or a subjective analysis riddled with factual errors and shallow knowledge of business in general and finance in particular. I am told that the tight budgets and intimate nature of the industry make some publishers afraid to engage with controversial subjects that might jeopardize a customer relationship. Either way, many industry professionals are basing their assessment of the market on dangerously incomplete information.
I am not going to provide a long-hand analysis of Guitar Center’s capital structure and every gruesome event in the company’s recent history; if you are so inclined, you may review my past work and browse Google.
A quick summary tells the tale of how close we are to the end, but first we should revisit the beginning. Guitar Center grew with the help of private equity firm Weston Presidio to become a national competitor and, eventually, a publicly-traded company. With the leadership of Marty Albertson, Larry Thomas, and others, the company continued to grow and prosper as a public company until leaders enlisted the help of Bain Capital to take the company private through massive leverage just prior to the largest financial crisis in a century. As you consider any of the other events associated with the present, this Original Sin of the past is the very root of the problem.
Private equity firms like Bain take mid-sized companies and pump them full of debt with the express intent of making them industry-dominating competitors, selling them to the stock market as a candidate for massive growth, and cashing in. To make this possible, private equity’s stake in the company is usually represented by “payment in kind” (PIK) notes, a type of bond that pays crushing interest – in this case 14.09% – but requires no cash outlay until the bond’s maturity. So that 14.09% is accruing, but it isn’t due for years, ideally after the company has been sold to what is often charmingly referred to as “the dumb money,” the retail investors who buy a stock without knowing the company’s true financial position. Before any of the company’s real problems are revealed, the private equity firm receives its payback in the form of stock, since PIK notes can be paid back in any medium of exchange. If all goes to plan, the stock price shoots up after the IPO and the PE firm makes a tidy profit – all in about three to five years.
Bain made two critical mistakes from which it cannot recover. First, it attempted to run this playbook on a company that had just done this very thing with Weston Presidio five years prior. Second, it did so just as the housing fraud and financial insanity which characterized the late 1990s and early 2000s nearly destroyed the U.S. dollar and left us with martial law. Every business maneuver that follows this initial error is too little, too late. Compound interest on debt is the strongest force in the universe, and retail has changed too much for any predictable corporate management technique to have a noticeable effect. The rest of this story is details.
To explain how close the company is to collapse, consider the following timeline:
December 2013: My blog post “Guitar Center and the End of Big Box Retail” goes unexpectedly viral just as GC management is negotiating with its creditors to deal with the fact that it does not expect to be able to honor its financial covenants in the near-term. In response, management claims that the firm is stronger than ever, that every single store is profitable, and that the $1.6 billion in debt with short-term liabilities of over $1 billion is manageable. The company has $25 million in cash going into the Christmas season. The Securities and Exchange Commission begins to investigate irregularities in how GC considers the interest on its bonds to be outside of expenses that would impact EBITDA.
March 2014: The company reaches an agreement with its largest bondholder, Ares Management, to exchange the latter’s PIK notes for equity. $401.8 million in PIK notes are retired in exchange for holding company preferred stock. In a statement by Standard & Poors, the agency expects to lower the corporate credit rating to “SD” which is “selective default” and considered tantamount to bankruptcy because it is a “distressed exchange” in which investors receive less than what they are promised.
April 2014: Bain and Ares offer the bond markets two new bonds to pay back existing bondholders, a $615 million offering of Senior Secured notes with a coupon of 6.5% maturing in 2019, and a $325 million offering of Senior Unsecured notes with a coupon of 9.625% maturing in 2020. These securities are purchased by institutional investors such as LeggMason, GoldmanSachs, and Prudential for their high-yield income funds which go to round out the assets of pension funds, ETFs and other, more conservative portfolios. They produce less than $50 million in free capital for Guitar Center and will still require an all-in coupon payment of around $35 million every six months. Guitar Center press officers attempt to portray this as a dramatic improvement of its financial situation in what is probably the best possible example of the Yiddish word “chutzpah.” Moody’s and Standard & Poors assess the company’s family rating as subprime and its unsecured bonds as junk, with outlook negative. Bond covenant analyses note that the restructuring will only produce enough free cash to pay for the interest on these instruments- there would still be little chance that the company could make strategic moves in the industry. This view assumes that business condition will remain the same or improve. If they get worse, all bets are off.
August 2014: Guitar Center secures a lease in the most expense real estate on earth – Times Square, Midtown Manhattan, New York. CFO Tim Martin claims that not only will this not be a drain on finances, they would make “a lot of money.” He also announces that then-CEO Mike Pratt’s “2020 Vision” was to achieve $3 billion in revenue in just five years – a 20% year-over-year growth in a slow-growing industry. The Times Square Guitar Center debut was accompanied by a 36-second video from the grand opening described as “a new gateway to hell,” featuring fifteen metal guitarists and three drummers playing nonsense simultaneously. It received 500,000 views in the first 48 hours.
November 2014: Guitar Center is forced to admit to bondholders that despite its promises to thrive from its new capital structure, its EBIDTA has slipped 35%, same store sales are down, and total revenue is flat. Secondary debt markets double the yield on its bonds overnight. Investors who committed to the bond months before are willing to take a 10-35% loss in a few short weeks rather than commit to the company’s future. CEO Mike Pratt resigns and is replaced by Darrell Webb, a retired executive whose most recent experience is as CEO of JoAnn Fabrics and the Sports Authority, two companies that also answer to private equity.
December 2014: Guitar Center fires Gene Joly, longtime executive and current president of the Musician’s Friend unit, two days before Christmas.
January 2015: Citing a bloated cost structure that keeps the company from achieving historical profitability, new CEO Darrell Webb fires 42 corporate executives, including the last remnant of Mike Pratt’s team, as well as 28 regional managers. Music Trades reports that the company is down to $10 million in available cash after Christmas.
The constant, smarmy mantra of impenetrability and infallibility has finally been dispelled. Their new executives have, at long last, ceased the comedy routine about how Guitar Center’s stores are always profitable no matter how many times Standard & Poor’s declares them technically in default, or that a billion dollar of debt is totally normal and wonderful and manageable. In a recent email, Webb explains the firings with the dry rationale of needing to be profitable, and foreshadowed that the company will “continue to seek efficiencies.” We seem to be hearing much less about that $3 billion in future revenue and much more about the jobs yet to be cut.
After all the noise, we are entering the final phase.
THIS IS THE END, MY FRIENDS
Nobody can manage this situation, much less lead the organization out of chaos. All reports indicate that Darrell Webb is not there to save a thing – he reportedly has less knowledge of the music business than the Canadian who was just warming his chair. You would think that if Ares Management was serious about saving this company, they would choose a younger, more innovative executive able to lead Guitar Center into a disruptive future, but instead they hired a man who wouldn’t know a Marshall Plexi from a nuclear submarine. I submit that Webb is the perfect choice for his likely mission: to lead the company into an orderly bankruptcy. Should the company achieve Chapter 11 reorganization instead of the final, fatal Chapter 7 liquidation, it must be on good terms with vendors and bondholders. They can lie to employees all they want, but accounts must be in order if there is to be value salvaged from this doomed structure. Thus, the new CEO has been chosen based on a cold-blooded ability to shuffle the books for private equity financiers, not for his ability to lead a musical instrument organization into a disruptive future.
I have already read analyses of Webb’s recruitment as a way for Ares to get somebody more capable of achieving “their” vision. This is a mass hallucination that stems from the old PR team’s attempt to recast the financial failure of 2014 as the addition of a smart, valuable partner with expertise in retail based on that company’s recent takeover of Neiman Marcus alongside their partners, the Canada Pension Plan Investment Board. Commenters in the musical instrument industry seem to understand little about Ares Management, a very large, serious firm that has, since taking equity in Guitar Center, gone public and engaged in a strategy that would put it more in the category of the JP MorganChases and GoldmanSachs of the world. There has not been a single public comment from an Ares employee since 2014 about the future vision for Guitar Center and I suspect that one does not exist. Go look through Ares’ quarterly reports and press releases and search for the word “guitar.” Perhaps that will provide a perspective on the relative importance of this transaction to a company with a much largest financial play in the works.
This is pure speculation, but given the size of their investment I imagine they see Guitar Center as a deal they made back in the mid-2000s before the crisis, one that Bain screwed up. They probably took the equity as the best way to perhaps get something instead of pennies on the dollar. These days, they’re more busy reopening factories in Europe along with national partners. They have better things to worry about than this sad scene, but this is a conclusion that will be very uncomfortable for members of the musical instrument industry who will not want to feel quite so unimportant.
The fact is, the die is cast. In a couple of weeks, Guitar Center will need to report its Christmas performance to its bondholders. If things do not look good, its bonds will be ripped apart like Radio Shack’s. Moreover, if I had to guess, the $10 million in Guitar Center’s coffers will not be enough to make the payment to their bondholders due in April 2015. In advance of that, they will need to seek protection under Chapter 11 of the bankruptcy code. Maybe they have another ultra-complex trick to bring out of the private equity playbook, but this whole thing is a waste of time. None of this sells guitars or inspires kids to be better musicians in a world where laptops play the tunes. We’re all analyzing the most mundane details of the terminal symptoms of this sickness that has seized American business culture in the past twenty years. Perhaps we need to heal that disease before we can back to fun things such as playing guitar and running profitable companies.
Here’s what this really means: it’s the end of big box retail, an irrational addiction to growth, and the scourge of unregulated structured finance. For a few years, unwise urban planning and unregulated banks created a new bubble in the American suburbs. People bought homes they could not afford and turned their houses into lines of credit. This swindle eventually brought the economy to its knees and has taken most a decade to regain some state of uneasy equilibrium. Still, it was particularly stimulating to a certain type of retail that also depended on constant growth and financial trickery. The objective truth is that the growth of the last decade was financed by banking fraud, and that financial trickery of this sort only fools people in the short-term. Eventually, you must have a product people demand, sold by competent people who care about the business, financed in a way that makes sense.
This unforgiving reality will work great for local stores and entrepreneurs with a classic, cautious approach to business management. For a while, suspending our disbelief in reality allowed standard-issue corporate financiers to run a pump-and-dump scheme on all kinds of retail, selling risky ventures to “dumb money” and reaping the rewards for a select few. We are all wiser now, and the market conditions simply will not support that behavior.
This is not a moral judgment, merely an assessment of market engineering. Small and smart will carry the future while big, dumb, complex, and dishonest will bite the dust.
These conclusions were my instincts before I conducted research into the example of Guitar Center. I was reasonably sure then, and I am entirely convinced now. The only remaining question is where the industry will go from here. Go ask the good people at Behringer for a preview. Representatives from their company have informed me that since they parted ways with Guitar Center they discovered a network of smaller, more focused retailers who were more than excited to form a stronger relationship with their company, and in turn delight customers even more. This resulted in the company’s greatest annual revenue in history, both in the United States and throughout the world. Behringer seems to think that a world without a single, corporate, banker-driven industry hegemon is not only possible, it’s preferable.
That’s a bright future, if you choose to share that vision. But whether you believe in it or not, this scenario is unavoidable. Guitar Center is finished. Now the musical instrument industry can get back to business.
Edited by MusicMishka 2015-02-03 3:45 PM
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Location: Jet City | I heard they laid off loads of upper and regional management. What do you mean by 'goes Kaput'? edit: now you posted more. Still, this is speculation... there's nothing gone yet. I know they're building a new super store over in redmond and closing kirkland. I haven't heard of this affecting anyone at the store level yet, though it does seem to be just a matter of time. Spending $ on new stores and laying off management seems to be their strategy. I can't see how that'll work
Edited by Damon67 2015-02-03 3:53 PM
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Location: Keepin' It Weird in Portland, OR | I don't know about Store Management or Private Equity... But here is a thought.
There are three Guitar Centers in the Portland area, and I have been to each of them ONCE.
There is one near Clackamas Town Center... But not part of the actual shopping Mall.
There is one near Washington Square mall... But not near the actual shopping Mall.
And there is one near Jantzen Beach... But actually a mile over the river near a few closed-up stores.
I have never seen many cars in any of these stores parking lots,
and there were always more employees than customers in the stores.
(and they never have any Ovations or BC Rich or Steinbergers or anything that I wanted)
How can you make any money with that business model?
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Location: Blue Ridge Mountains | Guys, the article is really well written by a fellow that has followed this for years...it takes a few minutes to read it but it's all based on facts and figures...the patient may still have a pulse, but there is little or no brain activity...not speculation, it gonna happen starting now...GC laid off 150 middle staff following NAMM...pink slips! 40% of Fenders Sales/business is through Guitar Center...of course after what they just did to New Hartford there may not be many tears shed here!
Edited by MusicMishka 2015-02-03 4:43 PM
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Location: The Great Pacific Northwest | I think it's a good article, but it only talks about the financial mistakes.... there was/is a lot more to it I think. I buy most everything online. I can get EXACTLY what I want, not what's left on the shelf, and in most cases it's in my hand FASTER than if I waited until I had time to go to the store. Moreover... I have done things like gone to Cabella's or Home Depot or even little shops here and there, and then come home and ordered what I found online. I have a friend that has worked at JC Penny for several years. They may have already done it, but they were trying to get OUT of the "Ship to Store" trend because locals (like me I guess) were just coming in to the pickup counter and picking up our stuff and leaving. They had to staff a whole store for that... not to mention the overhead caused by the returns of items they never actually carried in the store in the first place.
I'm not alone on this. While I agree with everything in the article... Online sales from everything from eBay, Amazon and even their own Musician's Friend must hurt.
But, there is hope... lets not forget, there's still Sam Ash, Hugo Helmer, Banana's At Large, AMS, Sweetwater Sound. Castellano's, Victor Litz, etc.. You may not have heard of these, but they aren't small stores either and in some cases they ARE small chains. They have all learned alternate ways to balance or embrace the online sales AND keep stores open and appealing.
Even GC's customer service model, while maybe good on paper, was being taken advantage of. I learned early on that if I was going to buy something like a Microphone and needed to try out several, just buy the most expensive one first check it out. Return it to try another... check it out, return it try another... then when it's decided which one to buy... return the last one, and then head to eBay to buy it cheaper. Umm err.. at least so I have heard... not that I would do anything like that... But it couldn't have been good for their business.
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Location: Fitzwilliam, New Hampshire | Its hard for any store to put much margin on the items they sell. Some of the smaller stores in my area spend more time doing E-Bay, CL, etc than the effort they put into their inventory, displays, qualified personnel, etc. Its a trend for sure but its too bad the personal touch of buying instruments has taken a back seat to the big distribution channels on-line. As much as I shop Musicians Friend for some items, talking to someone in person who most likely is a working musician with much knowledge to share, that piece is missing with on-line purchases. I also find the on-line reviews misleading, since may times those that rave about a particular item are more often newbies that don't have the experience or know-how of what constitutes the best sound under various conditions or settings. Everything sounds great in your home studio but seldom lives up to it in a live situation. So many factors to consider. To those that have that experience you probably don't need the extra input from a reputable source but even after many years of gigs, etc, a different point of view usually surfaces some aspect of the sound, setup, etc that I hadn't thought about. In some cases, I'm willing to pay a few bucks more to the value added aspect of a purchase that I'm confident in. In some cases it also saves times, returns, etc. Everything has a value and its not always the dollar! GC is the Wal-Mart for the music business and we've all have our feelings on how the big-guy squeezes out the local family owned businesses taking the personal touch and relationships out of the customer experience! nuff said........... |
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Location: south east Michigan | Sweetwater are the guys to beat.
I can call & get knowledgeable advise & suggestions. Then, when I do place a online order I get a follow up phone call within a half hour. |
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Location: Fitzwilliam, New Hampshire | I've used Musicians Friend with similar results. However, I started getting calls from Sweetwater (how they got my number???) that were fishing for what I might want to purchase was a turn-off. With all the telemarketing things, robo-calls, etc going on, the last thing I need is being hounded by another marketing entity. Having to continually adjust my PC settings to get around RocketTab, Adware and other "fishing" software, its nice sometimes just to shut it off and visit a friendly human being in a locally owned shop. All respects! :-) |
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Location: south east Michigan | I have not given up on buying local.
And I can't bring myself to window shop local then buy online. If my local guy has it... and that's what I want... I buy it there.
edit:
Unless it's Guitar Center... screw those guys.
Edited by Slipkid 2015-02-04 8:29 AM
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Location: Flahdaw | Those hedge fund or private equity charlatans have more tricks up their sleeves than David Blaine. Look for the bleeding and back door destruction to carry on longer than seems possible. |
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Location: Texas | Bob is all over it. Restructuring debt is second nature to the Bain Capitals of the world. Although I am not sure how much leaner GC can become, I am sure they can circle the drain for a while, as evidenced with them opening a new store in Times Square last year. As far as Musicians Friend...they are a subsidiary of GC...so nothing more than GC online w/o tax. |
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Location: Rego Park, NY, | I got an email today from The GC in Manhattan asking me if I like my recent purchace and the service i received during the purchase. It had a salesman's name and contact number. The only problem is I have Not been into Manhattan except for Chinatown in more than a month and I have never been to this store where the so called purchase took place. I also have not made a purchase in any GC for at least 4 years. What's UP? I'm sure its not their stock price. |
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Location: Texas | Phil, luckily they have not traded publicly since being acquired. Even if GC bowed out...could a mom and pop music store make a go of it with the ever present internet competition? |
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Location: Flahdaw | I think a mom and pop could make a go of it today. Might not get rich, but could earn a decent living if they did it right, in the right market, with the right inventory. Here in Sarasota it could work. A higher end, boutique store selling to an affluent market, maybe select high quality used guitars.
There is a market here for that, but you'd have to keep the riff-raff out, banging up the merchandise, wasting the owner's time, and devaluing the merchandise... |
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Location: Boise, Idaho | My favorite thing about GC was they carried Ovations, while my favorite local mom and pop down the street didn't. The local went out of business a few years ago and I quit going to GC because they never had any Ovations. Like Brad, I prefer to buy local whenever I can, but my options are really limited now. |
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Location: Utah | Our local Mom & Pop is surviving the old fashioned way. He rents out rooms for lessons, caters to the school band rental market, and sells a decent selection of strings and doo dads. He sells some but not a lot of guitars, amps, and basses. 90% of his inventory is mid range or higher. His prices are ok but not great because he can't even buy from his distributors for as low as some high volume discounters sell for during special sales. But he does offer good service and knowledgeable sales staff. Everyone working there is a very good musician who won't blow smoke up your skirt.
As I think about the demise of Ovation, GC, Fender, and even Gibson in terms of reputation, it seems the problem is the accountant mentality and the oversupply of cheap stuff. Technology, materials, etc have made it possible to provide a very good foundation for an instrument in the $200 to $500 range. But the accountants strip out the last bit of human refinement in the finishing steps. Lots of people can buy good, yet still deficient, guitars for a crazy affordable price. It has cheapened the instrument, reducing the demand and appreciation for better instruments.
If Ovation were to survive, it either has to be a cheap mail order commodity or a more expensive rare musical instrument. |
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Location: Suisun City, Ca | Brad Durasa - 2015-02-04 8:26 AM I have not given up on buying local. And I can't bring myself to window shop local then buy online. If my local guy has it... and that's what I want... I buy it there. edit: Unless it's Guitar Center... screw those guys. Same here. From a Baritone and Flute for my daughters years ago, to a bunch of guitars over the years to my 1st O, Gordons Music in Fairfield! I'm soon going to buy a piano, and it'll be local, too. |
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Location: Suisun City, Ca | AstroDan - 2015-02-05 2:56 AM Brad Durasa - 2015-02-04 8:26 AM I have not given up on buying local. And I can't bring myself to window shop local then buy online. If my local guy has it... and that's what I want... I buy it there. edit: Unless it's Guitar Center... screw those guys. Same here. From a Baritone and Flute for my daughters years ago, to a bunch of guitars over the years to my 1st O, Gordons Music in Fairfield! Now, for Ovations, it's here in the "For Sale" forum. I'm soon going to buy a piano, and it'll be local, too. |
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Location: Utah | FlySig - 2015-02-04 5:23 PM
Our local Mom & Pop is surviving the old fashioned way. He rents out rooms for lessons, caters to the school band rental market, and sells a decent selection of strings and doo dads. He sells some but not a lot of guitars, amps, and basses. 90% of his inventory is mid range or higher. His prices are ok but not great because he can't even buy from his distributors for as low as some high volume discounters sell for during special sales. But he does offer good service and knowledgeable sales staff. Everyone working there is a very good musician who won't blow smoke up your skirt.
Are you by chance talking about Bert Murdock music in Orem? |
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Location: Blue Ridge Mountains | One other aspect that's worth noting is the rapid and steady decline of the new generation in learning to actually play an instrument. With computer software that allows the user to mimic virtually any instrument imaginable, more and more are simply taking that route rather than putting the time in that's required to play actual instruments...new piano sales have plummeted, and more and more school systems are either cutting back the funding for music and arts related studies and after school programs or simply eliminating them all together. A quick look at the numbers of quality pianos available for sale on Craig's List for example is shocking and the prices listed are near give away and in several cases are just that. Not old junk pianos either, but quality expensive when new pianos. Look at the live music scene in the country...more and more weekend gigs instead of the 6 or 7 night a week gigs that were so prevelant 15 or 20 years ago that utilize live music...many bands are made up of musicians that tend to be older generation players as well, because they are proficient enough to play the instruments at that level. There is a current resurgence of AOR and MOR music in venues around the country precisely for that reason. To the younger club patrons, much of that music sounds new. Irregardless, the music scene has changed...albums that used to require multiple thousands of dollars for studio time are now being recorded, mastered, and disseminated using laptop or PC computers and iPads w/Garage Band or any number of DAW's costing around $500 and made available by Internet sales and digital download. This is becoming a majority trend not a minority
The bottom line Is the less and less demand for stores and businesses that are dependent on the now sadly antiquated music business as usual concepts and expectations. The economy has changed...fewer can afford that shiny new instrument costing multiple thousands of dollars. Bread and Butter sales in MI today is found in the circa 1.5K region and below...retail is about Quantity Sold...but, there has to be a demand! |
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Location: Utah | BrickGlass - 2015-02-05 6:48 AM
FlySig - 2015-02-04 5:23 PM
Our local Mom & Pop is surviving the old fashioned way. He rents out rooms for lessons, caters to the school band rental market, and sells a decent selection of strings and doo dads. He sells some but not a lot of guitars, amps, and basses. 90% of his inventory is mid range or higher. His prices are ok but not great because he can't even buy from his distributors for as low as some high volume discounters sell for during special sales. But he does offer good service and knowledgeable sales staff. Everyone working there is a very good musician who won't blow smoke up your skirt.
Are you by chance talking about Bert Murdock music in Orem?
Hyland Music in Sandy. |
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| MusicMishka - 2015-02-05 9:45 AM
One other aspect that's worth noting is the rapid and steady decline of the new generation in learning to actually play an instrument.
Maybe for Guitars and Pianos but not orchestral instruments. My wife is a Classical Cellist and teaches young students. She only has so much time and routinely has to turn away new students.
When there's an opening in the string section of a decent orchestra hundreds of Violinists will apply. |
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Location: Keepin' It Weird in Portland, OR | MusicMishka - 2015-02-05 6:45 AM
One other aspect that's worth noting is the rapid and steady decline of the new generation in learning to actually play an instrument. And you have to actually PRACTICE to play an instrument.
And somehow playing DJ on a laptop is considered the same as being a musician... 
Apparently playing a guitar isn't necessary to get girls anymore.
When I was a kid we had to walk six miles barefoot through the snow to get laid and stoned. |
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Location: Flahdaw | Have you guys even WATCHED American Idol???? There are some fantastic players out there. Not just on that show.
I am blown away by the talent exhibited by some of these 20 year olds..... |
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December 2006
Posts: 6996
Location: Jet City | Cello is the new lead guitar. Brandi Carlile has an awesome lead cellist, Josh Neumann. Here he is opening a song with his cello and a looper. If the song sounds familiar, it's because it's the opening to Master of Puppets http://youtu.be/5WtJF-mMzX8 |
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September 2006
Posts: 10777
Location: Keepin' It Weird in Portland, OR | darkbarguitar - 2015-02-05 2:19 PM
Have you guys even WATCHED American Idol???? There are some fantastic players out there. Not just on that show.
I am blown away by the talent exhibited by some of these 20 year olds..... Have you guys even WATCHED American Idol?
No... I can't sit through all the filler crap to see a coupla minutes of music.
Maybe I should search YouTube for some clips.
As to the ability of the young'uns...
There is a kid (20's) I see around town who can play "Sultans of Swing" note-for-note.
Plus he can play most songs asked off-the-top-of-his-head.
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Posts: 1483
Location: Michigan | oh boy bobg is watching american idol , lurking in the darkness to find the next 20 year old duane allman.GWB |
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March 2004
Posts: 137
Location: Fitzwilliam, New Hampshire | ....without sounding like a hawk waiting for road kill, I'm hoping GC has a "going out of business" sale! The odds are slim but maybe I can pick up a deal on a 12-string Ovation I've been lusting for!! What would they do with all that inventory????? Sell it off to Sweetwater, Sam Ash or some other biggie??? |
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January 2009
Posts: 1249
Location: Texas | "What would they do with all that inventory"
Musicians Friend is a subsidiary of theirs and I think they are profitable.
They have thinned out employees and stock...and what stock they have left in Amarillo isn't expensive.
Top end is about 1K here. |
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March 2004
Posts: 137
Location: Fitzwilliam, New Hampshire | Musicians Friend must have let my customer service rep go since after trying to reach him for a simple request on a past purchase, they never returned my call!!!! |
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February 2005
Posts: 11840
Location: closely held secret |
MF was awesome... until GC bought them.
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December 2006
Posts: 6996
Location: Jet City | "All that inventory"
Catalogue resellers usually only stock things that move quickly. Most things are drop shipped from the manufacturers or distributors.
At least that's how it's done in the tech world |
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March 2004
Posts: 137
Location: Fitzwilliam, New Hampshire | There is tons of store inventory that was my main point. They stuffed every store with a lot of gear which was probably their marketing ploy for the quick purchase but as the new world order of bean counting, having a heavy inventory is a lot of idle cash with interest to be paid on it. |
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March 2005
Posts: 12759
Location: Boise, Idaho | When I first went to Guitar Center it was because my daughter had a problem with an Ibanez guitar she ordered from MF. She lived in a little town without a GC. The assistant manager was very helpful and he and his successor got to know me as "the Ovation guy." I told both to let me know if they got any good Ovations in, but they never called, so I went in regularly on the way home from work. Both of them gave me great deals on Ovations and a Hamer, but left for other jobs. After that it seemed like I was more of a regular than any of their employees, so I quit going, except to buy strings if I get a GC gift card from a relative. I still get their flyers, but rarely see anything that interests me. |
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January 2006
Posts: 5881
Location: Colorado Rocky Mountains | One of our local GCs just completed a major remodel and it appears that they've added much more inventory. This will be interesting to watch. I stop by every now and then a check out the bargain bins. My most recent purchase was a Live Wire 50' 20 place snake for something like 70% off retail. That thing really helped clean up the bandroom floor. I used to buy cables from them, but now prefer the lifetime guaranteed Ultimates now carried by Alpep for only a few dollars more. |
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December 2006
Posts: 6996
Location: Jet City | The last new guitar I bought from Guitar Center was in 1984 (Mark the VXT doesn't count since technically you paid for it).
I won't shed a tear when they go. |
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July 2005
Posts: 1609
Location: Colorado | I will admit when they first came out - I liked the fact I could see lots of gear side by side - and A/B the stuff...many of the local stores - which I still prefer supported particular brands - which I understand...but after a few trips - I realized G/C was cold...saw just the same stuff...and quite frankly the staff didn't really know how to use the gear they sold....many years ago I probably sold more Ovations for them than their staff...just by sitting in the room - playing one - and talking about it...and people hearing with their own ears the quality. There was one D-41 - Don McLean model that was sweet...they wanted 2400...a good buy...went home - ran an errand - came back with my pedals to really listen to it through my stuff...it was gone...it was sweet. Played a couple others since then...weren't the same:-). |
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December 2006
Posts: 6996
Location: Jet City | My last Guitar Center guitar purchase experience (very recent)...
I called a Florida store and asked about an LX guitar they had in their used inventory. I asked detailed questions about the condition as they had it marked at '3 stars'. He said all looked real good, minor wear, but the action was higher than he prefers.
I asked if they could check to see if there were shims under the saddle. He said it was impossible to check without removing the strings. I politely suggested that I could walk him or his guitar tech through the process of checking without removing.
He asked me to hold... a few minutes later... he picks back up and tells me his guitar tech says it's impossible on a painless bridge. I wanted to assure him it's very possible, but decide it's would only lead to more frustration. So I tell him I need to know this before making the decision to buy. They call me back after removing the strings and tell me there's ONE shim under. I verified that the case came with it per their ad saying it did. I was assured it came with a case. I gave my cc# and info and waited for it to arrive.
Day of arrival...
I hear the UPS truck out front, go get it, and IMMEDIATELY know something is very wrong. It's way too light. I turned the box right side up, opened the top, and there was a layer or so of bubble wrap, and the butt end of the guitar sticking up at me, upside down (standing on the neck), nothing wrapped around it NO CASE, no nothing. There was a small amount of bubble wrap at each end, nothing in the middle but the guitar they obviously just threw in.
I didn't pull it out or anything at that point. I closed the end back up, put it in the car, and drove to the nearest local GC store. I was there within 30 minutes of the UPS truck dropping it off. I brought in the box, asked for a manager, and had him open it up the rest of the way. He couldn't believe it either. I wanted to be sure the manager saw any damage first hand.
Well, guess what. Ovations are fuckin-badass and ready for a war zone, cuz there was NOTHING wrong with it, and as a matter of fact, it was still in tune.
The local manager was kind enough to deal with the Florida store for me and the case was eventually sent out, but REALLY PEOPLE. There is a person who's JOB IT IS to pack and ship at these stores. There's a sales person who's supposed to LISTEN to the customer. There's a so-called 'tech-guy' that could have learned a new trick for his trade. And there's a store manager who's supposed to be making sure all of these folks are doing these things, but no...
This was a fail at all levels.
It was an EPIC fail for a company that is supposedly trying to pull themselves out of the crap they're in. There's no quality control, there's no accountability, there's no care in the world about customer service. Have a look at retail organizations that actually do well. Two local companies here, Costco and Nordstroms, are great examples of customer service centric companies that are thriving.
This is just the last story, I have MANY others. There's been 2 different times they've shipped me guitars that were totalled beyond repair, and it was obvious they left the store that way. One time they sold me a guitar without telling me someone had done a home made scallop job on the fretboard. And then, and then, and then
I get better customer service at Jack In The Box
They deserve all the ill that's coming their way. |
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December 2006
Posts: 6996
Location: Jet City | Oh, BTW...
While the local manager was on the phone with the Florida manager hashing things out, I sat in front of him, slacked the strings, capoed the 12th fret, and lifted up the saddle to find two (not 1 like they had told me) shims.
The local manager just shook his head and smiled.
Ovation ROCKS
Guitar Center sucksass |
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June 2012
Posts: 2333
Location: Pueblo West, CO | damon67 - 2015-02-21 2:59 PM
slacked the strings, capoed the 12th fret, and lifted up the saddle to find two (not 1 like they had told me) shims.
That's all the better. |
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September 2006
Posts: 10777
Location: Keepin' It Weird in Portland, OR | So? Which chain store will you miss more: Guitar Center? Or Radio Shack? 
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October 2005
Posts: 4071
Location: Utah | I used to love Radio Shack 30 years ago. I would check tubes from the old B&W tv there and could buy whichever ones I needed. I bought lots of electronic components from them to build various projects. |
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February 2005
Posts: 11840
Location: closely held secret | damon67 - 2015-02-21 2:53 PMThere is a person who's JOB IT IS to pack and ship at these stores. There's a sales person who's supposed to LISTEN to the customer. There's a so-called 'tech-guy' that could have learned a new trick for his trade. And there's a store manager who's supposed to be making sure all of these folks are doing these things, but no...
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Location: Midwest USA | FlySig - 2015-02-22 9:15 AM
I used to love Radio Shack 30 years ago. I would check tubes from the old B&W tv there and could buy whichever ones I needed. I bought lots of electronic components from them to build various projects. Me too! It was about 50 years ago when I was 9 my Dad would take me to the radio shack to test the television tubes. I loved figuring out the pin pattern on the tube tester. We got hooked on Heathkit electronic stuff. Built the electric garage door opener first and then moved up to the ham radio and electronic organ. Spent a lot of time soldering as a young girl. Dad was an electrical engineer. Too bad parents don't build projects with their kids any more. Those are some of my favorite memories.
Edited by Bird Dog 2015-02-22 2:36 PM
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Posts: 4071
Location: Utah | The younger generation only knows throwing things away, not fixing them or building them. |
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August 2011
Posts: 887
Location: Always beautiful canyon country of Utah | And the art of soldering is becoming a lost art!! Nothing like the smell of sizzling flux to get yur adrenaline going!! |
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March 2004
Posts: 137
Location: Fitzwilliam, New Hampshire | I still have a pair of 676 GC German made power tubes I bought from Radio Shack many years ago. Gold plated pins and a lifetime warrantee! Doesn't sound like the warrantee will last too much longer! And Yes, they had a tube tester which was great! A great place for hobbyists but its so true that many don't have a clue on soldering, building simple circuits etc. Amazon was rumored to be looking at acquiring them.......who knows.
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Posts: 40
| My 16 year old had a bad input capacitor on his Bass head. He thought he needed a new amp. I went to Radio Shack got a replacement cap and soldered it in. For a day or two I was elevated to "*** like" status. |
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March 2005
Posts: 12759
Location: Boise, Idaho | I recently went to Radio Shack for the first time in years for a couple of outdoor speakers. I must admit that I was shopping online and didn't think about Radio Shack until I saw that they had the best price online. The store was on the way home and had what I wanted for 25% off because of the closures. The clerk even seemed to know what he was talking about, but couldn't get the credit card scanner to work, so I couldn't buy them. I went back the next day and bought them. I just like being able to see what I'm shopping for and talking face to face with someone, unless that someone doesn't know anything. |
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December 2006
Posts: 6996
Location: Jet City | I used to go to radio shack all the time. There's one not even a half black away. I don't have much ill to say about them, they just kinda lost their relevance in my world.
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March 2004
Posts: 137
Location: Fitzwilliam, New Hampshire | Just a piece of history. Anyone remember Lafayette Radio? Kinda like Radio Shack back in the 60's. Not sure if they had stores then but their mail order catalog was huge with all the pieces, parts, stereo's, real-to'real decks etc etc. ! They left the market a long time ago........ |
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The End of an Era