http://ultimateclassicrock.com/guitar-center-imminent-bankrupcty/
Guitar Center, the largest chain of music equipment stores in the U.S., is reportedly facing “imminent bankruptcy." Digital Music News said that financial service firm Standard & Poor’s recently downgraded the business to CCC– status, indicating that a default event is expected in the near future.
With 269 stores across the nation, Guitar Center has a history stretching back to 1959, when it began as Organ Center then The Vox Center before a final name change in the ‘70s. Despite dismissing 180 employees in 2015, it’s carrying a debt of over $1 billion and narrowly avoided defaulting on repayments this month, which led to the downgrade. Another financial service company, Moody’s, warned investors: “The rating outlook remains negative.”
The crisis follows similar problems at Gibson Brands, Inc, the manufacturer of Gibson guitars. Earlier this year it emerged that urgent reconstruction was required to avoid its collapse. Last month it was reported that $560 million was needed to cover debt repayments by the summer, following a round of staff layoffs, and investors were pressuring CEO Henry Juszkiewicz to step aside in favor of a new management structure.
In an earlier interview, Juszkiewicz had argued that guitar businesses had struggled to recover from the 2008 financial crash, and said he’d been trying to persuade guitar stores to modernize their offerings. “I’ve been arguing with retailers for a long time that you have to be a place where [customers] can sit and take in the store, and be a destination that is friendly. If you walk into most music stores, there's nowhere to sit. Give me a break! Most stores aren't comfortable places. … t’s all about making the customer feel welcome, and helping them out by being knowledgeable. That's what the industry needs, because it doesn't have it. We have to get people involved in music, and offer them a helping hand.”
Everyone has a plan, till you get punched in the face,
A new Guitar Center store just opened near me last week which kind of blew me away. If they do end up closing them up, I wonder how that will affect Gibson, which is already on life support financially.
In an earlier interview, Juszkiewicz had argued that guitar businesses had struggled to recover from the 2008 financial crash, and said he’d been trying to persuade guitar stores to modernize their offerings. “I’ve been arguing with retailers for a long time that you have to be a place where [customers] can sit and take in the store, and be a destination that is friendly. If you walk into most music stores, there's nowhere to sit. Give me a break! Most stores aren't comfortable places. … t’s all about making the customer feel welcome, and helping them out by being knowledgeable. That's what the industry needs, because it doesn't have it. We have to get people involved in music, and offer them a helping hand.”
There's a lot of truth in this. There's a music store here that literally has "Do Not Touch" signs plastered all over the place.
"You need to pay us the $1,799 for that first, then you can touch it."
Not surprised. Kinda reminds me of Blockbuster, the big shark company decimates small locally owned shops and then gets done in by internet retail/rental services.
My local Guitar Center has the most limited selection of gear I have ever seen, its basically just an oversized studio space for music lessons. When you need something they just say, “hmm don’t have that in stock but we could order it for you”, with outlets like Sweetwater and Musicians Friend offering free shipping GC has become obsolete.
bummer. the ones I have visited and bought stuff from (drum equipment, used and new) are pretty friendly places
I'm no expert by any means, but it seems like a lot of people check out gear at stores, then buy online to save a couple of bucks. The local independent store that offers lessons, repairs, and a small amount of essentials may become feasible again. We'll find out!
jmacs, you nailed it. Repairs and lessons keep me going local. Plus, I would never buy a serious guitar via an online site; you need to hold it in your hands. I did buy a $100 beater imitation Strat online, mind you.
jmacs, you nailed it. Repairs and lessons keep me going local. Plus, I would never buy a serious guitar via an online site; you need to hold it in your hands. I did buy a $100 beater imitation Strat online, mind you.
A bubby of mine bought a guitar from China. Brand new Telecaster copy and the price was $50 US. I laughed when he told me and couldn't wait to see what type of crap came to his house. The guitar arrived and the setup was unplayable. Imagine my surprise after we adjusted everything properly - it played and sounded pretty damned good especially for a $50. It is equal to a guitar costing about $400-$500 over here. I couldn't believe it. Not suggesting buying a guitar unseen from China but after being proven wrong......I sadly had to admit that you can get a decent brand new guitar at insanely low prices. He bought a half dozen more (various models) from the same company with pretty much the same results. Paid $75 for some. Sold them for around $300+ per guitar. A couple were clunkers that had tuning issues but all in all. Well made. How anyone can buy the materials, labour and sell the damn things and profit at $50 - $75?
But that is what the guitar companies are up against. Fender and Gibson both make lower value versions of their own Top guitar lines. For the first time in both companies history, they are both lowering the quality and value of classics. Of course you can spend more and get a Top line Strat for thousands but you can also get one for well under $1000. Both with the Strat name. As a proud Les Paul man - I hate that.
For music stores, not sure if it is the same in the US but the big box stores like Best Buy now sell guitars. They buy from companies such as Gibson and Fender at greatly reduced prices because of quantity. The music stores have to match their prices or lose the sales. No profits at all.
Shame as a music store provides far better service and expert knowledge. Also the Box stores store them in warehouses without concern for environment, climate and humidity. The strings are often just lying across the next and unplayable out of the box.
A music store would never sell you something unplayable. After all these years, the people in the stores are friends and I would never stop shopping locally.
A friend of mine was having amp troubles at a gig. The manager of the local music store drove over and brought him back an amp from the store to get through the show. Let's see Amazon or another online give that service. I bet many of you have similar stories.
jmacs, you nailed it. Repairs and lessons keep me going local. Plus, I would never buy a serious guitar via an online site; you need to hold it in your hands. I did buy a $100 beater imitation Strat online, mind you.
I'm glad it's working for you Jim. It makes no sense at all that a tele copy from China could sell for $50....something is rotten in the system and it's not sustainable. Slave labor?
jmacs, you nailed it. Repairs and lessons keep me going local. Plus, I would never buy a serious guitar via an online site; you need to hold it in your hands. I did buy a $100 beater imitation Strat online, mind you.
I'm glad it's working for you Jim. It makes no sense at all that a tele copy from China could sell for $50....something is rotten in the system and it's not sustainable. Slave labor?
Even with slave labor, how can they make money? I was so skeptical that everything would be pure crap and it wasn't. Far from being a Tele but it is a decent, playable guitar. I laughed when I saw the color too - Mustard Yellow then it started to grow on me.
Watch for closing week then pounce.
Re the cheap guitars from Asia, it isn't slave labor, a slave can't build a finely crafted instrument. bunch of reasons:
Your dime is a dollar over there.
They learned to build them to spec.
No restrictions on the finest tone woods, they own the last rare wood forests, of trees that the West can't touch.
Even with slave labor, how can they make money
Sometimes it isn't about making money, not short-term, sometimes the bigger picture is to take as much market share away from the primary companies as possible to damage them and position the import companies for future sales.
Sad. We shouldn't be allowing it to happen, the imported guitars sold below cost I mean. Sell it here, make it here.
jmacs, you nailed it. Repairs and lessons keep me going local. Plus, I would never buy a serious guitar via an online site; you need to hold it in your hands. I did buy a $100 beater imitation Strat online, mind you.
A bubby of mine bought a guitar from China. Brand new Telecaster copy and the price was $50 US. I laughed when he told me and couldn't wait to see what type of crap came to his house. The guitar arrived and the setup was unplayable. Imagine my surprise after we adjusted everything properly - it played and sounded pretty damned good especially for a $50. It is equal to a guitar costing about $400-$500 over here. I couldn't believe it. Not suggesting buying a guitar unseen from China but after being proven wrong......I sadly had to admit that you can get a decent brand new guitar at insanely low prices. He bought a half dozen more (various models) from the same company with pretty much the same results. Paid $75 for some. Sold them for around $300+ per guitar. A couple were clunkers that had tuning issues but all in all. Well made. How anyone can buy the materials, labour and sell the damn things and profit at $50 - $75?
But that is what the guitar companies are up against. Fender and Gibson both make lower value versions of their own Top guitar lines. For the first time in both companies history, they are both lowering the quality and value of classics. Of course you can spend more and get a Top line Strat for thousands but you can also get one for well under $1000. Both with the Strat name. As a proud Les Paul man - I hate that.
For music stores, not sure if it is the same in the US but the big box stores like Best Buy now sell guitars. They buy from companies such as Gibson and Fender at greatly reduced prices because of quantity. The music stores have to match their prices or lose the sales. No profits at all.
Shame as a music store provides far better service and expert knowledge. Also the Box stores store them in warehouses without concern for environment, climate and humidity. The strings are often just lying across the next and unplayable out of the box.
A music store would never sell you something unplayable. After all these years, the people in the stores are friends and I would never stop shopping locally.
A friend of mine was having amp troubles at a gig. The manager of the local music store drove over and brought him back an amp from the store to get through the show. Let's see Amazon or another online give that service. I bet many of you have similar stories.
I agree with Jim and Mule. I have got to be able to hold and play a guitar before I buy it and DEFINETLY the ampI have to hear. I always enjoy going out to the local stores with my guitar and testing out new amps. I checked out the Vox AC15C1 Limited Edition Maroon Bronco awhile back and its a SWEET amp. Cant do that online.
Honestly, I cant afford Gibson's. Well I could, but just don't want to spend that much. I play Epi's and do a few mods here and there and they are a quality instrument.
Everyone has a plan, till you get punched in the face,
