'Fear of a GC Nation', GC buys Music and Arts

**j-raj** · #1 03-16-2005, 10:15 AM

As some of you might know Guitar Center just purchased Music and Arts recently and the full 'roll-out' should happen sometime towards the middle or end of April.

What some of you might know is that GC currently owns AMG (American Music, where I'm currently employed), which up until this recent aquistion, was GC's company that dealt with Band and Orchestra rentals/sales in the educational markets. There currently are 19 AMG locations and 62 M&A's locations. What will 'most likely' happen is that all of the AMG locations, will take on the Music and Art moniker.

I'm not sure how many of y'all receive Music, Inc. magazine, it is a trade mag that many music retailers subscribe to. They report on many of the happenings in the music retail industry, from new companies, 'aquistions'... NAMM stuff etc. In this month's issue the editor (Frank Alkyer) wrote a great editorial titled 'Fear of a GC Nation' (hence where I got a portion of the title of this thread). In the article he starts off by saying "For Everyone in the industry who has lived in fear of a Guitar Center nation, there's one more reason to shudder..."

GC currently has 190 retail shops, with the expected goal of 500 locations... M&A has a recent history of buying small market (i.e. 'mom and pop shops') school music businesses. Since 2000, M&A has purchased 14 of these type of companies.

So, now what are your thoughts?

CQBASS · #2 03-16-2005, 10:39 AM

welcome to WalMart nation... The only way to stop the horrifying growth of these mega corps is to not shop there....period.

The Golden Boy · #3 03-16-2005, 10:57 AM

I fear it.

GC is targeting the manufacturers as well. Once 'specialty' shops are eliminated, price point crap will become the norm.

Look at Gibson. They're making it impossible for small scale dealers to retain their 'dealership' status by creating unreasonably large minimum orders. I believe (the figure I've heard) is that Dave's Guitar in LaCrosse WI moved in excess of a million dollars in merchandise for Gibson in the past year- Of course most of that's Custom Shop sales, and they see less of a profit than selling Epiphone stuff. But Dave's is no longer a Gibson dealer.

Point is, when internet sales and homogenized guitar stores are the only outlets for merchandise, the quality will go down. And once there is a dominant retailer, they can force the manufacturers to do their bidding. (where's a devil smiley?)

burk48237 · #4 03-16-2005, 10:58 AM

Quote:

Originally Posted by CQBASS

welcome to WalMart nation... The only way to stop the horrifying growth of these mega corps is to not shop there....period.

Ageed, I avoid the GC's at all cost , I would rather pay a little more for quality service (there's a crazy idea-quality service at a GC) and for instruments that are well takin care of. If your Idea of a great universe is MIM Fenders, Line 6, Warwicks from Korea then keep shopping there!!
( I am not knocking that stuff in the hands of beginners or people with limited financial recources) but I want to be able to check out an F bass or a Ken Smith once in a while. And the Idea that one company will control the music universe and decide what we can shop for and what's good enough for us is pathetic. If your Idea of a perfect world is a place where all high end stuff is mail order or only available in New York or LA, keep shopping there. And don't kid yourself if the GC near you has
"good stuff", the one near me use too, but then a few local shops closed and suddenly the quality stuff begain to disapeer. Trust me on this one, if we keep shopping there we'll all be wearing cute little "blue vest" somedays.

**j-raj** · #5 03-16-2005, 11:43 AM

oh yeah I forgot to add... Most of us at this location aren't sure about the stability of our present jobs. Each day for the last week or so, there has been M&A top brass here looking at the warehouse and the repair area. They have already decided that the retail front here is going ot be eliminated...

Man, last year I left the financial industry to be a gigging stiff... Went back to working a day gig for health insurance. Ahh, what to do....

*Anybody in the ATL-area need an ex-financial cat(compliance/licensing), ex-warehouse supr.? I think that I might be needing a nu-gig!
hint: my resume is on my site.

MJ5150 · #6 03-16-2005, 12:31 PM

I'll be nervous when GC buys TB and the Dudepit. Those are the two places I go for bass gear.

-Mike

Hambone · #7 03-16-2005, 01:15 PM

Man, I hope GC doesn't get a taste for Woodwind Brasswind. It would be a shame to lose that source for instruments.

**j-raj** · #8 03-16-2005, 01:35 PM

Quote:

Originally Posted by Hambone

Man, I hope GC doesn't get a taste for Woodwind Brasswind. It would be a shame to lose that source for instruments.

wwbw? gosh I hope not...

Brook May!

P. Aaron · #9 03-17-2005, 11:34 AM

Look at what consolidation has done to rock & POP radio. But as big as these conglomerates get. They also fall apart in pieces when the going gets tough.

We don't neccesarily like to see this kind of thing but it's nothing new.

Against Will · #10 03-17-2005, 11:38 AM

Quote:

Originally Posted by P. Aaron

Look at what consolidation has done to rock & POP radio. But as big as these conglomerates get. They also fall apart in pieces when the going gets tough.

When the going gets tough, they just fire a bunch of people, change the logo and get Lil' Jon to appear in their ads; look forward to seeing a reinvented GC,Y [Guitar Center, YEAAAAAAAAAH!].

It is written.

P. Aaron · #11 03-17-2005, 02:18 PM

Quote:

Originally Posted by Against Will

When the going gets tough, they just fire a bunch of people, change the logo and get Lil' Jon to appear in their ads; look forward to seeing a reinvented GC,Y [Guitar Center, YEAAAAAAAAAH!].

It is written.

Yup, that's it more or less. It doesn't mean I like it anymore than anyone else, but it is unfortunately the way business works, or fails. Folks lose their jobs, stuff like that. GM is takin' a hit right now, watch it all shake out and realize we've seen it in other industries for as long as we've paid attention to this sort of thing.

wyliee · #12 03-17-2005, 04:12 PM

Quote:

Originally Posted by j-raj

I'm not sure how many of y'all receive Music, Inc. magazine, it is a trade mag that many music retailers subscribe to. They report on many of the happenings in the music retail industry, from new companies, 'aquistions'... NAMM stuff etc. In this month's issue the editor (Frank Alkyer) wrote a great editorial titled 'Fear of a GC Nation' (hence where I got a portion of the title of this thread). In the article he starts off by saying "For Everyone in the industry who has lived in fear of a Guitar Center nation, there's one more reason to shudder..."

GC currently has 190 retail shops, with the expected goal of 500 locations... M&A has a recent history of buying small market (i.e. 'mom and pop shops') school music businesses. Since 2000, M&A has purchased 14 of these type of companies.

So, now what are your thoughts?

One of the seminars I attended at NAMM was about how to grow your lesson program. The actual content of the seminar was almost more on how a small independent shop can survive in a GC world.

I do worry. On the rare times I do venture inside a GC, I come out shaking my head at the sad state of their gear and general trashiness of the store. I believe there are two huge flaws in the GC business plan and I encourage small stores to take advantage. The GC's in my area do not offer comprehensive lessons and the quality of their repair departments tend to be lacking. In other words, its great that you saved so much money on gear at GC. But do you know how to play it and maintain it?

The big hook in the seminar was to invest in your customer. Develop a relationship with them and they will stray.