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charlie brown

Is Guitar Center/Musican's Friend/Music 123 in dire financial straits?

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CB,

Thanks again for another post that generates a lot of interesting comments. As usual, I'll post some remarks that may be applicable, some that won't:-#

I agree that large retail stores aren't worth much to my mind. There's a lot of new models, lots for younger players looking for high output humbucking guitars on the cheap, and lots of over-pricing. Over the past few years I've found American Musical Supply, Guitar Fetish, and Ebay as my primary sources of purchases. Why pay for the overhead for these large retail chains, when, in my opinion, many of the employees don't know as much as the members of various forums I review? When I lived in Portland, OR, there were many local retailers that provided excellent service, great stock, and knowledgeable staff. When I got to Cleveland, all I had was the large retailers, and was disapointed.

I made a few purchases via Ebay this year after trying out guitars at GC...so thanks GC! I'd rather save money through Ebay purchases after I learn the specs of a guitar, or get one used, even, at a great price. That's how I scored my FBird.

Well, either way, I am somewhat anti-corporate in my outlook, so if the big retailers go, so be it. I'll still be able to get on Ebay and score pickups, cases, strings, etc. I'd much rather support independent retailers, even if their storefront is in cyberspace.

(just to add....I spoke with a lot of retail salespersons this past year at these chains, and most were cool and willing to help/listen/assist, so no offense against guys and gals out there trying to pay the bills working in a guitar store!)

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geetar playr,

 

I'm not sure where you are located in Cleveland, but have you ever gone down to Kent and visited Woodsy's? Fender, Gibson, Gretsch and a few other brands. Nice Mom and Pop store that has been around for years. http://www.woodsys.com/?type=cc&id=40&53L3c73d=40

 

I was born and raised in Cleveland and now live down in Aurora.

 

If you haven't been to Woodsy's and find yourself in the area, it's a nice place to visit.

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Trying to be "fair," here...

I really only had one negative issue with MF, and none with GC...but, then I only bought from 3 of them, while living

in Los Angeles...Hollywood, Sherman Oaks, and Pasadena. They were all good to me, in both price and

customer service. Don't know if they're still that way, but I had good experiences, in all three of those Guitar

Center stores. The MF issue, is still unresolved, and I think it always will be...but, it wasn't so bad, that I wouldn't

do business with them, again. In fact, I just did, when I bought the Riviera P-93 LE. With GC, I've found, that if I went

directly to the manager, told him/her, what I was looking for, the price I wanted to pay (or less), and the condition

I expect it to be in, they are (usually) quite helpful. "Salespersons' can be great, or "tedious!" Just depends

on the person. But, if you do your homework, know what you want, what it's going for, in other shops, and just

be "straight" and courteous, it usually works out well. But, like any business, big or small, there are always exceptions, in both directions. I must say, however, that "Sweetwater," has top notch CS, if a bit less inventory. A lot of "Box Companies," could learn a thing or two, from their approach...again, IMHO.

 

CB

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geetar playr' date='

 

I'm not sure where you are located in Cleveland, but have you ever gone down to Kent and visited Woodsy's? Fender, Gibson, Gretsch and a few other brands. Nice Mom and Pop store that has been around for years. http://www.woodsys.com/?type=cc&id=40&53L3c73d=40

 

I was born and raised in Cleveland and now live down in Aurora.

 

If you haven't been to Woodsy's and find yourself in the area, it's a nice place to visit.[/quote']

 

JS - thanks for the info! I am headed back to Oregon next week, so I am saying farewell to Ohio. At least there are Mom and Pop gee-tar shops still around, that's good info for any Epi Ohio forum members!

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Am I the only person in here that LIKES buying from GC, because not only can I

persuade them to give me a better price, I can usually get a case and some "goodies"

thrown in too? They DO know me, and seem to hate it when they see me come in

my usual 3 or 4 times a yr (1/2 those times are to return mdse. thats crapped out from the previous visit), but I almost always get a deal from them.

 

Maybe everyone needs to come to the store in Birmingham (apologies my Britt friends, thats) Alabama

to do their shopping.

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And I guess it doesn't help that companies like Best Buy are going full on

into taking a large piece of the pie... their customers have more buying power

with their best buy credit card than GC, i would imagine...

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It's just the credit crunch...anyone watching the news these days? A company like GC exists on credit.

 

Also' date=' as soon as the economy gets a little tight discretionary spending goes out the window. And buying guitars is discretionary spending.

 

I'm at our local GC often, and it sucks, but every time I'm there someone is hauling something out of there.

 

If GC goes down, Gibson will be kissing the a** of every mom & pop store in the country.

 

 

[/quote']

 

Exactly... The stock market was down 10-15% from January to September, then took a deep plunge. If you go back and look at your 401k market accounts, this is apparent. The credit crunch has virtually stopped retail dealers from being able to replenish stock.

 

Mom and Pop stores, at least the successful ones, make most of their cash flow from renting and selling school band instruments and doing repairs. They match the online store's prices by selling whatever they can get from the middle tier distributors who buy guitars and amps in volume from the manufacturer and sell individually to dealers.

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Yeah' date=' if GC, MF & 123 went belly-up where would Gibby sell their guitars? They've already screwed over ever mom & pop they did business with for 50 years.[/quote']

 

They have a pretty bad record that way. That's why my local dealer no longer carries Gibson/Epiphone.

 

Of course, that forces me to buy used, at a good discount.=D>

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The way around the price fixing laws, in recent years, has been for the manufacturer to advance advertising shares to franchise stores. You've all seen them, 45 seconds of "Buy Chevy" followed by 5 seconds of "See Joe Dude at Dude Motors!". Of course, if the franchise doesn't toe the line on MSRP they don't get the sponsored advertising. This is why you never see a new Ric price on line. Its always, "Too low to show, email for price!"

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They have a pretty bad record that way. That's why my local dealer no longer carries Gibson/Epiphone.

 

Of course' date=' that forces me to buy used, at a good discount.=D> [/quote']

 

I think the point TulsaSlim was making is that Gibson (and this actually applies to many other brands, Fender included, to differing degrees) will not allow the little shops to sell their merchandise.

 

I remember speaking years ago with the owner of the small store I use to hang out at in high school and beyond. He told me he would like to stock Fender and Gibson guitars, but that because another store already had them he was precluded from doing so. I can't imagine this is only in that geographic market.

 

The problem with Peavey, according to another store owner, is that they won't let you stock just what you want to, you have to carry everything they have if you want to be a dealer for them.

 

So, it isn't just the big boxes that have put the little stores in the position their are in, but the restrictions imposed by some manufacturers as well.

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Yeah, the smaller music stores, quite often, can afford to stock the "minimum" order that these larger guitar companies

want them to, to become or even stay a dealer. Small camera shops, have much the same problems, from

the big camera manufacturers. If you can't stock "X" amount of dollars worth of merchandise, you can't be

(or stay) a dealer. Warehouse World! The little guys, that are staying in business, do it by "Internet" sales,

NOT by the "walk in" traffic, I suspect.

 

CB

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Yeah' date=' if GC, MF & 123 went belly-up where would Gibby sell their guitars? They've already screwed over ever mom & pop they did business with for 50 years.[/quote']

I read a bizarre report a few years ago that stated that all Gibson guitars would b sold exclusively through Elderly Instruments. Obviously that wasn't the case.

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Yeah' date=' and Rickenbacker, for one, severed it's relationship with Guitar Center (but not Musician's Friend), because of GC's questionable business practices, regarding Rickenbacker products. Not sure (exactly) what that meant, except maybe they were promising delivery dates, that [b']Ric couldn't/wouldn't meet, due to their well known backlog of orders, and long delivery times[/b], plus GC's pricing, of Ric products, maybe? But, I do know that Rickenbacker slammed the door on GC in short oder!

 

I wondered, too...if MF and Music 123 (being owned by CG) are in the mix, that way...or are seperated enough, as to not be so adversely effected? In any case, it doesn't look too good, but...who knows?

 

CB

 

Sounds like Ric has questionable business practices too. =D>

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The manufacturers want volume, just like the retailers. Small dealers can survive by their wits (our local guy has a bid in on every church sound system, state U event, rodeo, and you-name-it) despite the policies of the makers. As mentioned, that's part of the advantage of buying at a small store: they are used to wheeling and dealing, where the big box stores have a set price, and that's often the end of it.

 

I saw a post somewhere about the ridiculously low trade-in (or outright purchase) amounts that MF offers through the Trade In/Cash Out program (something like $470 for a Gibson Les Paul) but they're simply applying the time-honored car dealer system: dealers know that people want a shiny new car with lotsa bling, and they use that knowledge to separate the customer from as many of his or her dollars as they can.

 

Out of curiosity, I checked GC prices on used Les Paul Deluxes: the least expensive was $2K, which works out to 2-2/3 X what I got mine for; prices ranged up to $5300, with the majority of (6 out of 10) priced at $4K or above.

 

I also found a number of 335s, including 2 for about what I paid for mine, but they were lower-end models (satin finish) and neither, of course, had the nice lightly figured blond maple of mine.

 

News flash: a store isn't giving away its products! OK, but I prefer the good ol' days before those guys got into the business, and I bought a '63 Gretsch Chet Atkins Country Gent for $425, with original two-tone case. =sigh=

 

Good on Rickenbacker, too. I had a '67 366/12, and while it didn't really work for me, it was a true individual effort.

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I read a bizarre report a few years ago that stated that all Gibson guitars would b sold exclusively through Elderly Instruments. Obviously that wasn't the case.

 

Elderly no longer carries new Gibson or Epi products.

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Sounds like Ric has questionable business practices too. =D>

 

Well, Ric's has always had a proprietary attitude over dealers, at least

since I've been buying Ric's, from the mid '60's. You sell them at what

they tell you, or else...and, you'll get the product, when they say...and

not always when (as soon as) YOU want it, either. LOL! But, in all fairness to them,

they try (seemingly) to be fair to their dealers, in doling out their production,

so, that the smaller dealers don't get shortchanged, in the process.

I.E., they ship on a more equal basis, to all the dealers, not just the big'

ones. And, with their (always) ongoing backlog, everyone has to wait,

equally, too. LOL! "First come, first served," etc. And, they've always had

great quality...no real "Slump" that way, as Gibson and Fender did. In

many ways, Ric is more a "boutique" manufacturer, and a much smaller

(and family owned) company, than Gibson or Fender. So...???

 

Gibson, is feeling more and more (to me) like a "Boutique" guitar company...

in both Price, and attitude, (even though not in distribution or even quality), in some cases?

It's great they're making LP's and other guitars "Like (or better than) the 'Good

Old Days,'" but...I've said it before, and I'll keep saying it...why not make them

that way, to begin with, instead of making the "Good stuff" as "Custom Shop!" Greed,

that's why! But, if we (the consumer) are willing to pay those "Custom Shop"

prices, for something that should be made that way, anyway...I guess you can't

really blame them?!

End of mini-Rant! ;>)

 

CB

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I think the point Tulsa Slim was making is that Gibson (and this actually applies to many other brands' date=' Fender included, to differing degrees) will not allow the little shops to sell their merchandise.

 

I remember speaking years ago with the owner of the small store I use to hang out at in high school and beyond. He told me he would like to stock Fender and Gibson guitars, but that because another store already had them he was precluded from doing so. I can't imagine this is only in that geographic market.

 

The problem with Peavey, according to another store owner, is that they won't let you stock just what you want to, you have to carry everything they have if you want to be a dealer for them.

 

So, it isn't just the big boxes that have put the little stores in the position their are in, but the restrictions imposed by some manufacturers as well.[/quote']

 

The above leads to the proliferation of "grey goods" which are items purchased sideways and sold by non-authorised dealers. It's very common in the photo and audio industry. Half of the NY photo and audio super sellers on Ebay are dealing in grey goods....the same is true of many music sellers.

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Well the simple fact is if the music industry doesn't support the Indpendent Dealers than it can't complain when a major company like GC/MF who they've put all the eggs with goes belly up. I am in the Bicycle Business and most of the major bicycle manufactors like TREK, Giant, Specialized, Cannondale, etc... will not sell through Big Box stores or online stores... thus suporting the Independant Dealers and not undercutting our margins and profits. Sure they have minimums and stuff to be a dealer... but they work under the goal of making ALL their dealers successful. And we are still Independant and can make our own choices as to what we want to carry in our markets. Free market economy does still work, and some companies are still making a killing at it.... Trek Bicycles is make'n big money, even in a bad economy. Why? Because it leaves the selling of their product to the people that do it best... Independent Dealers who live and breath the sport because they love it. Not some huge obese big box store that doesn't even know your name!

 

I can't tell you how many times I've gone into GC and found the sales guy knew nothing about Guitars... "oh, sorry I don't play guitar... I play drums... but it looks like a pretty sweet guitar"!!!!! The name of the place is GUITAR CENTER for crap sake!! That would be like someone coming into my Bike Shop and asking me a question and me saying "Oh, sorry I don't ride bikes... I'm into Rollerblades"!!!! WTF!!

 

I was happy when Mars went down the can... and I'll be happy when GC does too!! Serves the greedy music business right for tring to bypass the Free Market!!!

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Not to demonize anybody, but the Harvard MBAs have done a tremendous amount of damage to the business over the years. After CBS took over Fender, they decided that dealer loyalty meant nothing: they redistributed franchises based solely on ZIP codes. It was the equivalent of the insane management policies of the '80s and '90s that punished employee loyalty.

 

I was just reading in Walter Carter's 100 Years on Gibson (or some similar title -- I'm too lazy to go check) that, after Arnold Berlin and Norton Stevens with their MBAs took over Gibson, they lost money faster than you could burn it. They kept making boneheaded decisions (all without any input from dealers or musicians) until Norlin, at one time a huge outfit that owned Olds band instruments, Lowery Organs, Moog, and many others as well as Gibson, wound up as a company that printed stock certificates...and then THAT was bought out by Pitney-Bowes. Gibson was estimated by industry people to be about 3 months away from liquidation when Henry J et al took over...and for $5M? In 1986? That, more than anything, tells you how far the whiz kids had run it into the ground.

 

Everybody comes out of the school wanting to be the next Wal-Mart, God bless their mean little hearts. There's more to life than cheap stuff for cheap prices.

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I hope MF doesn't go under because they have a good selection of left-handed guitars; I bought a Taylor 314ce from them a couple of weeks ago. MF along with Jerry's and Guitar Adoptions are the sites I visit most when looking at guitars.

 

Just found out that GC was no longer a publicly-traded company: On February 9, 2007, acquired out of a bankruptcy proceeding substantially all of the assets of Dennis Bamber, Inc., also known as The Woodwind & The Brasswind. The acquisition consisted of a variety of direct response catalogs and websites, including those under the brand names Woodwind & Brasswind and Music123, related inventory and other assets. Later that same year Guitar Center was taken private by the investment firm Bain Capital Partners (BCP) for about $2.1 billion.

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Not to demonize anybody' date=' but the Harvard MBAs have done a tremendous amount of damage to the business over the years. ...After Arnold Berlin and Norton Stevens with their MBAs took over Gibson, they lost money faster than you could burn it. ...Gibson was estimated by industry people to be about 3 months away from liquidation when Henry J et al took over...and for $5M? In 1986? That, more than anything, tells you how far the whiz kids had run it into the ground.

[/quote']

 

On the other hand, Henry J is also an MBA, and he and his associates (who are guitar lovers and musicians as well as biz whiz kids) should be thanked for saving Gibson, and growing it into the company it is today.

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Welllll ..... ummmmmm....... I guess eBay will still be there for us :-s](*,) ](*,)

 

 

 

....j/k, all y'all ..... 8-[ ....kinda

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On the other hand' date=' Henry J is also an MBA, and he and his associates (who are guitar lovers and musicians as well as biz whiz kids) should be thanked for saving Gibson, and growing it into the company it is today. [/quote']

 

As I said, I didn't mean to demonize anyone. Henry J has my heartfelt gratitude for remaking Gibson into a robust company and bringing back the classics...my ES-335 dot is an '00, built in Nashville. And, as noted, my beloved LP is a Norlin instrument -- as Jim Deurloo has said, even in the worst of times, the craftsmen keep doing it right.

 

And who would want to find themselves bidding up '70s LPs on eBay because Gibsons are being made in China?

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