Guitar Center's woes

[bobouz]

Really? That's how you feel about independent retailers? A family that took all the risk to open, stock and operate a small business to make enough money to feed and house themselves? Does the same apply to Target, Walmart and the like that move into an area and drive all those "scoundrel" independents out of business? Geez. You're hopeless as an American.........then again, maybe you're not an American........

I wouldn't be too quick to judge on this one. I don't find myself agreeing (in part or total) with Guitar Light too often, but over the years I've encountered a number of small-to-mid-town independent music shops that were exactly as he described. Junk for stock, priced at full retail, and a snarly snake-oil-salesman attitude to boot! I've also encountered some superb small shop owners, but in general they have been in larger metro areas. Of course there will be variations on this theme, but I don't think it's reasonable to generalize in either direction about the motivation & integrity of a small music shop owner any more than you might about any other type of small strip-mall business owner.

[Buc McMaster]

Well this is America....... If the market is not well-served in your neck of the woods that smells like an opportunity. Take the plunge: open your own brick & mortar and do it right as you see it. Put your money where your mouth is.

[BobF_]

The fact that someone took on risk and put together a business as a means to feed themselves doesn't mean that did it well.

 

Whether we shop at big places or small, or sometimes one, sometimes the other, *most* of us make purchases when we feel the value of what we're getting is at least equal to what we're paying.

 

I'm not going to pay more than I think something is worth as a philanthropic act. I *give* munny and stuff away for that purpose. If I'm looking for quality music gear, I shop where the value is.

 

It just so happens that *service* is part of the equation for me. I will pay more for a product if the service/support is there to make up the difference.

[bobouz]

Well this is America....... If the market is not well-served in your neck of the woods that smells like an opportunity. Take the plunge: open your own brick & mortar and do it right as you see it. Put your money where your mouth is.

Let's get real here, Buc. That's obviously not going to be in the cards for everyone.

[Buc McMaster]

Let's get real here, Buc. That's obviously not going to be in the cards for everyone.

 

Certainly not everyone, but if there is a market that is so poorly served by the existing establishments there is usually someone around that has the vision and the capital to build a competitor to take up what they perceive as slack. This is exactly what built the country. In fact, this is exactly what GC did.....go big with everything. GC has/had buying power that outstrips what a local, independent retailer can muster.

 

And think of this..... If GC is in a market that has one or two or three underperforming Mom & Pop shops, GC may well be part of the reason this is so. In gobbling up a lion's share of the local business and product variety they reduce the independents' power (read "income") to improve their services offered, staff size, inventory etc. GC has all the major brands, Mom & Pop can't get them as long as GC rules the roost. Take GC out of the market and suddenly there's a hole in the marketplace for the brands the independent couldn't get.........until then. Fender, Gibson, Martin....all the major brands will not leave a market without their product represented so perhaps the Mom & Pops will have new opportunities to expand with brands they could not previously acquire.

 

I don't give a hoot one way or another whether GC survises or not. I do care that Mom & Pop retail establishments that grew the nation are under attack by corporate America and have been for a few decades now. Do you really want a country where there's nowhere to go anymore but big box stores?

[Tarrr]

The ring of avarice is worn by the owners of the company and debt. Our local GC stores have nothing to do with this problem.

[jannusguy2]

The ring of avarice is worn by the owners of the company and debt. Our local GC stores have nothing to do with this problem.

Which brings us back to Bain Capitol and every single thing that that implies.

[milod]

Some additional environmental issues here to consider, too.

 

1. The thought that it's easy to go out and start a business has become increasingly a pipedream. I started several in the early 1980s on functionally a shoestring - less than my annual paycheck. I think that would be impossible today. Why? Increasing government regulation and various new governmental requirements - and increasing liability concerns.

 

2. Government overhead for a Ma and Pa has increased significantly. That's one reason I got out when I could in a rather long and not entirely successful exit strategy. Our first year in a service business had a paperwork/accounting overhead of around 10 percent of time/direct expense. Now the equivalent is closer to 25 percent or more. And that does NOT include additional concerns from Obamacare cost increases.

 

3. GC does apparently have some well-run stores. Never been in one, but a onetime regular poster in the Epi side here was a very knowledgeable and obviously hardworking and honest young guy. The problem comes in stores - as other "group ownerships" - where somebody has decisions on employee costs and goes with the teen incompetents instead of paying more to the teen with drive and a concept of customer service. I know I horrified my boss in my first "regular" retail job at age 19 when I pointed out strengths of some less expensive items as opposed to the weaknesses of "bling" items. Within a month I already had a personal repeat customer base who kept me at or near the top of the department sales and that turned my part time into full time. But how many of today's world's managers would have fired me after the first week in favor of a twit who pushed the bling?

 

4. Another problem with big corporate structures with local outlets is that the strong and efficient are weakened by paying for the weak and inefficient - and that too often results in both getting yet weaker, albeit paying off the stock/bond holders.

 

5. Nobody wants to admit that the increased efficiency of online isn't entirely why they're doing well - it's that consumers are considering whether to add 10 percent to an item at the same price point for the privilege of paying local taxes. Add $100 to a $1,000 guitar? Ain't that a little silly? It already costs me around $40 US just for the privilege of driving to my closest "guitar store." Add another $100 for which I receive what? So even the store that matches "Internet" prices costs me enough to buy a $1,000 guitar and a $150 in accessories - and I also lose around four hours time?

 

6. I refuse to buy a guitar unplayed that runs over $500. So... I've made some trips to the store regardless that it costs a lot more to do so. Cash that could go for guitar stuff goes instead to the gas pump and taxes - and cuts from how I budget guitar stuff.

 

7. Watch how additional government regs will even further increase the price tag on everything. My guess is that regardless of federal cost of living index, the reality is that I'll have roughly 18-25 percent less cash next year after tax and health insurance while costs of everything else I need rises by no less than 5 percent. Now, how will that affect my pickin' disease known as GAS?

 

The above are realities businesses are looking at. And I'd strongly suggest that my fellow U.S. residents consider rethinking their own budgets for next year. Mine this year got slaughtered by corporate health insurance cost hikes due to increasing Obamacare requirements - over $300 a month plus increased deductibles and "creative accounting" on deductibles by the insurance company to cover anticipated costs/losses due to you-know-what.

 

m

[Hogeye]

I've been around long enough to remember the origins of Guitar Center and I will tell this.... They were awful in the beginning. No one had ever done what they were trying to do and they just were not good at it. They were breaking new ground for the music industry and it wasn't always pretty. Well 20 years later they have smoothed out a lot of the bumps and are great to deal with. They listened and they adjusted.

 

They don't have a store in the entire State of Montana because the local mom and pops stepped up and met the challenge. GC only goes into a market where their research shows there is a need.

 

I'm old school and have been in nearly every music store in the U.S. The folks that were willing to adapt are still in business the others? Gone. This is good for the consumer. There has never been a better time to buy a guitar. The manufactures are stepping up the quality and the retailers are learning to adjust to the market. The NAMM organization is instrumental in this process. They are helping with information and classes to all the little guys out there. Competition is a great thing for all involved.

 

I want to see the small guys win this war. I want the money to stay in the small towns and I want Main Street to remain viable. Why? 'Cuz I'm old and crabby and I will never forget the help and encouragement I got from my little Mom and Pop store. Gone are the days when all you had to do was turn on the lights in the morning. Now you have to be in business and that is quite a shock to many.

 

I know of no small stores that price gouge or have bad service. They went down the road with the T-rex. All the stores I know of are very competitive and will price match and offer great service. Bless them for that. So... Hats off to all the guys like Mike and Jeremy Fuller at Fullers Vintage. Great job Stan at Mandolin Bros. Great job Fred and Paul Decker at Music Villa. Clay Baily you are my hero....Stan at Elderly is a huge asset to the music industry and how about George Gruhn down in Nashville. There are so many great stores out there with their own distinct personalities. What a wonderful thing to watch them fight for what is theirs. I will always shop local even if it means costing me a bit more. When is the last time you just stopped in to play a guitar and say thanks?

 

Just so you know....Thank you Bain for bailing out GC.

[marvar]

I don't know, I think something is up-

I drop into my local GC every couple of weeks, just to check stuff out.

I've noticed a dramatic drop in both used and new stock on the showroom floor, and the Knoxville GC is fairly large.

If you don't think the internet is the new shopping mall, just look at the record industry, where are all the record/cd/dvd stores now?

Shopping online isn't the same as playing/seeing/touching/trying out guitars in person, but, even with the 100% return policy, it would still be cheaper for those outfits, than keeping up a brick and morter, wages, etc.

Think about it- I know some say they would not buy a guitar without playing it, but, with those great return policies, you have nothing to lose if you don't like it- and, eventually, folks (we)will be swayed into that type of marketing. I think there will still be room for the smaller guys, there will always be a need for strings, used stuff, and lessons/repairs.

[BobF_]

I don't know, I think something is up-

I drop into my local GC every couple of weeks, just to check stuff out.

I've noticed a dramatic drop in both used and new stock on the showroom floor, and the Knoxville GC is fairly large.

If you don't think the internet is the new shopping mall, just look at the record industry, where are all the record/cd/dvd stores now?

Shopping online isn't the same as playing/seeing/touching/trying out guitars in person, but, even with the 100% return policy, it would still be cheaper for those outfits, than keeping up a brick and morter, wages, etc.

Think about it- I know some say they would not buy a guitar without playing it, but, with those great return policies, you have nothing to lose if you don't like it- and, eventually, folks (we)will be swayed into that type of marketing. I think there will still be room for the smaller guys, there will always be a need for strings, used stuff, and lessons/repairs.

 

I remember when the Knoxville MF was converted into a GC. I loved that place. I never did get cheese on my neck like Rik claimed I would :)

 

And let's not forget Ciderville. GC, Rik's and Ciderville all got nearly equal shares of my considerable gear budget back then.

 

Are Rik's and Ciderville still in business? There were still holding their own when I left that area in '01.

[milod]

Marvar...

 

It's not a matter of "okay I can send it back." I've actually done that with Sweetwater.

 

With something like a largely handcrafted guitar there will be those differences. HenryJ himself noted that the best way to get what is a magic guitar for yourself, you've likely gotta play a number of them.

 

The difference between instruments "meeting specs" doesn't sound like much, but even to my half worn-out old hands it's a doggone big deal - and although I'm no guitar god, I want a guitar that helps my technique rather than makes it more difficult and lesser.

 

All kidding aside, that's why I have the largely Epi stuff over the past 10 years and not one instrument over $1,000. My Eastman archtop is awfully nice, though - and that's the one I paid the extra tax and travel money to try.

 

I'm no Parkening, but the tales of how the pros buy their classical guitars at Sherry Brener in Chicago may be illuminating. I figure if those geniuses at pickin' will take that amount of time for the "just right" guitar in a batch of 5-figure works of art, it's incumbent on me similarly to find what best suits my technique and physical geometry within my budget - and frankly to me, any other concerns are lesser ones.

 

m

[marvar]

I remember when the Knoxville MF was converted into a GC. I loved that place. I never did get cheese on my neck like Rik claimed I would :)

 

And let's not forget Ciderville. GC, Rik's and Ciderville all got nearly equal shares of my considerable gear budget back then.

 

Are Rik's and Ciderville still in business? There were still holding their own when I left that area in '01.

Yep, and I worked as a temp at the MF warehouse when it was here,

Rik still won't rub cheese on your neck, but, he's severerly limited to what stock he can carry, mostly lower line stuff, some Godin and G&L has some good amps, he opened a cafe' inside the store, why I don't know-

I try to shop there when I can, or he has someting I need. Ciderville is still there, has a local TV show on cable.

Broadway Sound (Lynn's Guitars) has gone out of retail, just does contract/commercial stuff now. He retire years ago, and his daughter and Scott took it over.

[jannusguy2]

Just so you know....Thank you Bain for bailing out GC.

 

So, to be clear, you're grateful for Bain's "bail out" of GC (read: loading them up with debt and looting the company, that has brought them to this latest brink), but you don't shop there in favor of smaller, mom/pop outfits.. Just want to be clear as it's a bit confusing.

[Rain DeLay]

Yep, and I worked as a temp at the MF warehouse when it was here,

Rik still won't rub cheese on your neck, but, he's severerly limited to what stock he can carry, mostly lower line stuff, some Godin and G&L has some good amps, he opened a cafe' inside the store, why I don't know-

I try to shop there when I can, or he has someting I need. Ciderville is still there, has a local TV show on cable.

Broadway Sound (Lynn's Guitars) has gone out of retail, just does contract/commercial stuff now. He retire years ago, and his daughter and Scott took it over.

 

Any idea what kind of deal you can get at Ciderville nowadays? Didn't it used to be 50% off of list on a new Martin? Thank you

[milod]

I guess I can't forget when Norlin almost destroyed Gibson and ditto CBS with Fender.

 

Some venture capital outfits do exactly the rape and pillage; others, and I think Bain is this sort, try to figure a balance of minimum cost with maximum bottom line after stuff gets run through their accounting department to figure how to play government regs, tax regs, labor costs, cost per $100 in sales, etc. That's not inherently bad, and in theory is good for the company and customers if not necessarily for employees.

 

The thing is, when companies stop paying for quality sales people, in the long run sales go down. Bain knows that as well as anyone. But again, it's not a simple game. There's the music instrument business and then there's what most large corporations at the higher levels do, and that's playing the business of business regardless of the product or service.

 

The Ma and Pa try to run a musical instrument business. Some are both good with the instruments and good with business, some only have half of the success formula and flop, often blaming the big guy.

 

Were I Gibson, Fender or Martin, I'd not care to have a dealer that sold three instruments a year, and only after being discounted because the one on the wall had been there three years.

 

As for local stores... I've had good and bad relationships - on occasion a question of trust at one. But right now I live so far from much of any larger music store that it's kinda moot.

 

A point on Bain... As with other companies of its type, the purpose of the firm is to find companies that are not doing well and have a non-working business plan, and seek to rescue it. It ain't cheap. If it's rescued, then it is seen as a cash cow for the stockholders who risked their cash for it.

 

Now, do folks in business management of all sorts make mistakes? Yup. I've seen it in my own type of business, and in my own case, I'd add that labor unions' "management" stupidity caused a significant amount of whatever bad happened in an era when unions and management should have faced some harsh realities together. But only if it's a huge firm with the right political connections does the stupidity draw a federal bailout.

 

m

[Phelonious Ponk]

At least for the GC's in my State that I've visited, the staff were, IMHO, gearheaded boobs. The C/S was awful, guitars, esp. acoustics, very poorly cared for and just not much help at all. MF, on the other hand, gets me guitars next day (KC to Iowa)w/o frt. charges, free look for 45 days, excellent C/S & the Private Stock help/prices EXCELLENT.

 

Don't think this one is Bain's fault and GC would have been gone years ago if Bain hadn't intervened in GC financial mess they GC created. They can only try to fix the business flaws, but they can't fix poor employees & managers that drive off more purchases than they create. MF has/was a working & profitable business model and I hope not dragged down by GC shortcomings. Again, just what I've noticed in Iowa anyway.

 

Aster

 

Actually, this us exactly what you'd have to do if you want to run it as a successful business, and what you wouldn't bother to do if you just wanted to suck all the cash out of it, build up a huge debt, then write it off in receivership.

 

P

[generaldreedle]

I agree that the GC bashing gets about as old as the Gibson bashing gets on the AGF. So does using this thread to somehow rope in blaming things on Obamacare and labor unions. GCs are run by managers and people. The one I go to in Seattle has been pretty good to me, I can easily believe from reading about the experiences of others that the GCs in other areas are run by trolls. I have a great independent music store here Dusty Strings --- they're good but they don't carry Gibsons and consistently bad mouth them as opposed to Collings or Taylors. I would never buy a guitar there.

[Fullmental Alpinist]

.

I use to get people asking me what kind of rheostat the $10 department store Sunbeam iron had when I worked part time for $3 an hour part time in college.

 

So, don't leave us hanging. What kind of rheostat did the $10 department store Sunbeam iron use?

 

FMA

[modoc_333]

I must say that when this thread started, and I added to it, i never wanted it to turn into a GC bash. That's not the point. The point was to ponder what would happen if such a whale were to die because it looks like a possibility. I mentioned in my own reply some bad things that would come of it. I have never liked the company myself and I had bad experiences. I also understand that many stores are run very well and people have good experiences. I am a competitor of theirs and that has it's angle too of course.

 

Basically i am saying that there is no need to bash them. Everyone here already has their opinion one way or the other. I think it's a good to discuss what changes could come if they fell, and whether or not we think that will happen. I would like to find a way for the industry to be better if that were to happen. I hope this thread can go in that direction. As a hypothetical: what would you like to see happen if GC disappeared or shrunk drastically? how good the independents do better for everyone?

 

Also, I have to thank Hogeye for saying "Clay Bailey is my hero". HaHa! he is my boss and i deal with him on a daily basis. He is a tough guy to work for... that's for sure. But we try to do things the right way. It's REALLY HARD sometimes to do that. Serve customers well, keep the business running, etc.... but we try. I will say this though: no one in the industry takes it more personally than him. That guy will do anything he has to do to make the company successful. Usually that can lead to some really bad service for customers. But Clay really does realize that he only has 2 things going for him if he wants to make it work: Surrounding himself with really good employees, and having happy customers walk through the door. I will tell Clay that you said it. I am sure it will give him a smile!

[marvar]

Any idea what kind of deal you can get at Ciderville nowadays? Didn't it used to be 50% off of list on a new Martin? Thank you

not sure about that, I haven't been there in a long time- I do know he sells lots of Martins

[BobF_]

not sure about that, I haven't been there in a long time- I do know he sells lots of Martins

 

IIRC, it's been a long time, Ciderville would sell you any Martin, Gibson, Fender, etc. for 50% of MSRP + $100.

[badbluesplayer]

Yeah - I go to the Knoxville store when I'm down there. The place is getting pretty empty. They stock maybe 10% to 25% of the top end guitars. They must be really struggling.

 

The people in the store are o.k. They're selling hard but they're not too bad.

 

I don't like paying sales tax any more than anybody else. I'm buying all my stuff off the internet. The sales tax issue is killing the brick and mortar guys in high sales tax states like mine.

[Searcy]

And we here in Nashville are getting a second Guitar Center. I hope they pull it together as I have a lot of friends that work there and most of my gear comes from there.

 

http://www.franklinhomepage.com/guitar-center-to-hold-grand-opening-for-cool-springs-location-cms-14504

[rct]

eh. Long predicted, bound to come true someday I guess. I have a great GC, I'm friends with the manager, the staff is decent and no pimple faced kids bother me, they usually know I'm only going to deal with him. Pretty good stock in the store. According to him they are strong despite anything on a "blog". I think that's what is strange about todays economy, is that some guy writes something on his blog and everyone jumps on it.

 

If they did go, it would be bad for our hosts and the guys out in CA and the jokers in PA. We got no dealers around here, nobody but the big guys like GC and SA can afford to deal Fedners and Gobsins and Mirtans, it would be at least a 50 mile drive to go see the latest NotSoGreatacaster.

 

If they do go, wait til the last day of existence. Mars had the giant three final days, last day was great, almost a "make me an offer" day.

 

rct