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Daddy's Junky Music closing all stores

#81
senp5f said:
its lenders have certain cash-flow covenants that govern when the lender can "call in" a loan. Daddy's would take out a line of credit from a bank
The lender's patience ran out, and they foreclosed.
You're dealing with soulless money people. ...rather than the people who tried to serve musicians for years.
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And as I have heard, this is GE Financing. Their whole new stock was hanging by this string (financing) and what they owned, the used market, went way down. Daddy's Junk Music in years past, had the best reputation and community outreach- even music education and school band instrument sales. These things seem to have gone away, probably from trimming the payroll, even before the 08 loss of confidence in the ponzi scheme our economic system is, and GE, even though they thrive on the good reputation of their products, "needs" to cover their xxx with more short term decisions like the ones that got us here. The bad forecast for retail gave them the motivation and excuse.
btw, one of these guys running for prez used to do this as his job, built an empire liquidating family businesses after the 3rd or 4th generation decided to get out and get the $.
 
#83
Sad. Got my first bass and amp from Daddy's in Dedham close to 10 years ago now. The people there were always super cool. I knew nothing about basses and wanted to get the cheapest bass they had since I was just starting out, and they actually wouldn't let me walk out the door with it until they'd done a full setup on it.
 
#84
Unfortunate. I feel for the customers who had items in repair or on layaway, and of course for the suddenly unemployed who didn't see this coming. I had been a regular customer, but gradually their inventory got less and less interesting, the knowledgeable staff I had good relationships with were replaced with generic clueless kids, and CS suffered. I stopped going altogether when the attitude towards trade-ins changed. Somewhere along the line, at least at the store I used to visit, the standard procedure changed to include insulting the gear and belittling the customer for owning it, followed by an insulting offer. Even that wouldnt have been so bad if the same item didn't show up on their web site later at an excessively high price. I was fine when they just offered about half of what they thought they could sell it for. Strangely enough this coincided with them not getting much good gear traded in.

The news does make me want to go buy something from Union Music in Worcester, even though I can't afford and don't need anything. REALLY want that place to stay in business. Experienced staff of grown-ups, the only G&L dealer I've ever seen, and a wonderful acoustic guitar room.
 
#85
Stores come / stores go but I really liked my local Daddys. I got to know the staff at my local (Portsmouth NH) store by name and even if I wasn't in the market to buy anything, it was always a good "hang" and pretty decent deals. Since they kniew me and I was a regular customer, I did get good deals there. I feel really bad for the staff. Nice people.
 
#86
pcollin said:
Stores come / stores go but I really liked my local Daddys. I got to know the staff at my local (Portsmouth NH) store by name and even if I wasn't in the market to buy anything, it was always a good "hang" and pretty decent deals. Since they kniew me and I was a regular customer, I did get good deals there. I feel really bad for the staff. Nice people.
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I agree....I used to stop by just to BS and see if anything piqued my interest...great bunch of guys....
 
#88
senp5f said:
I am a reporter at a business newspaper and have covered a lot of bankruptcies, and I have to second this poster's advice.

A company can very easily be forced into default when times are tough -- oftentimes, agreements with its lenders have certain cash-flow covenants that govern when the lender can "call in" a loan. If the loan can't be immediately repaid, the lender has the right to foreclose on any real property that has been pledged as collateral.

Now, the plain English translation. You have to understand that businesses largely run on credit in our economy. Daddy's would take out a line of credit from a bank to buy a whole bunch of guitars. The hope is that, by charging about 30 percent above the cost of those guitars, Daddy's can pay rent, pay its people, pay back the credit and interest used to buy the guitars, and then have a little left over (i.e., profit).

Typically, if you take out a line of credit to buy inventory, the inventory is used as collateral -- that is, the lender gives you money to buy the guitars, but if you mess up and don't pay the lender back, he can seize the guitars.

Often the lending agreements will say that Daddy's has to have a certain amount of free cash flow on hand. It's kind of the lender's way of taking the temperature of its borrower. If Daddy's is busted on its last dime, there's a good chance it can't meet its loan payments.

So, imagine this: You use a credit card to buy a guitar. The credit card firm says, hey, we'll loan you money, but the guitar is our collateral. If your checking account balance falls below the minimum monthly payment of the credit card, the credit company has the right to demand that you pay back the entire balance immediately -- or else it can seize the guitar.

I suspect that's what happened here. Daddy's was on the bring, and it only took a week or two of bad sales to trip the trigger. The lender's patience ran out, and they foreclosed.

The said thing is that now you are not dealing with the folks at Daddy's. You're dealing with soulless money people. They technically own all that inventory now and all they care about is getting their money back. They have ZERO incentive to please any of Daddy's former customers.

In these situations there's even the possibility that the lenders will change the locks on all the stores and bar the Daddy's people from entering. If you know someone at the shop, get everything in writing and get it AS SOON AS YOU CAN. The Daddy's people probably did their best to save the company, but you may soon be dealing with their soulless lenders rather than the people who tried to serve musicians for years.
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Thanks for the clear and informative post. It belongs on each subsequent page of this thread.

Great explanation of what went down and sound advice to all who have remaining business with Daddys.
 
#89
Hi. Another option is if you paid with a credit card you have some additional protection, but I wouldn't wait long. Many credit cards have a warranty protection plan included as part of their card - hardly anyone every uses it on most cards. Not sure if it is applicable to a debit card. You can also dispute the charge if it is fairly recent since you returned the item for repair and no longer have the item. Best of luck.
 
#90
BassBrass said:
And as I have heard, this is GE Financing. Their whole new stock was hanging by this string (financing) and what they owned, the used market, went way down. Daddy's Junk Music in years past, had the best reputation and community outreach- even music education and school band instrument sales. ../QUOTE]

A big factor in what killed Daddy's was the lawsuit from a few years ago that they had to settle in the neighborhood of $600,000. It also looks like they did not have the proper insurance in place, although I am not certain about this but if you have proper liability insurance in place that lawsuit would have been convered -well, maybe in any case. Since they were highly leveraged, it is not surprising their bank called the loan. This is not greedy money people, this is a risk issue with a business that made some unfortunate decisions. At our store, we avoid long term inventory financing and run as much as possible on a 30 day term. We cannot grow fast and are not getting rich but it allows us to keep our employees employed and our debt low.
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#91
LAME. Damn internet. They knew me on a first name basis in my local Orange, CT shop.

I was a regular customer there, but it's not like I was some high dollar high roller or anything. But I often traded them good stuff, and pulled a lot of sweet bargains out of that place. My 400RB, one of my best pieces of gear, was from there-- heck, they had several for me to choose from, and even took it in for a cord replacement and a shot of deoxit in the pots!

Great manager, and a decent bunch of folks working in there. I don't really like in-your-face commission-driven CS, so the mellow vibe of the shop totally worked for me.

Power amps, mixers, SRM450's, condenser mics, vintage Ibanez basses, a Hammond M3, my old Marcus Miller, strings, my 12 string, charity Christmas-wish gifts through church (whenever a kid wanted a guitar, that was the star I'd pull off the tree in the church basement), my crazy orange Flame Ash Top Strat.

Man, what am I going to do now???
 
#92
Standalone said:
LAME. Damn internet. They knew me on a first name basis in my local Orange, CT shop.

I was a regular customer there, but it's not like I was some high dollar high roller or anything. But I often traded them good stuff, and pulled a lot of sweet bargains out of that place. My 400RB, one of my best pieces of gear, was from there-- heck, they had several for me to choose from, and even took it in for a cord replacement and a shot of deoxit in the pots!

Great manager, and a decent bunch of folks working in there. I don't really like in-your-face commission-driven CS, so the mellow vibe of the shop totally worked for me.

Power amps, mixers, SRM450's, condenser mics, vintage Ibanez basses, a Hammond M3, my old Marcus Miller, strings, my 12 string, charity Christmas-wish gifts through church (whenever a kid wanted a guitar, that was the star I'd pull off the tree in the church basement), my crazy orange Flame Ash Top Strat.

Man, what am I going to do now???
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Different church that has GC prizes? :ninja:

I got nothing else here. :hiding:
 
#94
Standalone said:
There are prohibitions against shopping at GC in Leviticus. :D
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I think we're gonna see a lot more of these types of things - not you post but the closing of old stores and facilities. I helped at a yard sale today, played a little bit of music and helped attract customers. They came anyway.

Sorry --- I digress.

I saw an observation --- amusing-to-me thing --- happening though. One of my buds has a lot of power tools for construction for sale - seriously deep discounts and a lot of really great tools too. Not one sale of any of them was made to anyone. No-one even looked at them.

People ain't working and they fer sure aren't in the market for more tools for their trade - in fact they wanted to put some of their stuff in the pile too on a sales contingency.

Yup it's a Biblical situation I'm sure - but I got a real reference for ya:: (Ezekiel 7:19) 19*“‘Into the streets they will throw their very silver.*.*.

I see big 4WD trucks and boats and flat screens and home theater systems and even motorcycles on front lawns with signs that say: 'Take Over Payments' or 'Cheap - Best Offer' all over the place.

People need food and a roof first, then toys. This is why there's such grief on the retail level with failures and seizures of assets happening more and more ---- and it ain't done yet.
 
#95
SurferJoe46 said:
I think we're gonna see a lot more of these types of things - not you post but the closing of old stores and facilities. I helped at a yard sale today, played a little bit of music and helped attract customers. They came anyway.

Sorry --- I digress.

I saw an observation --- amusing-to-me thing --- happening though. One of my buds has a lot of power tools for construction for sale - seriously deep discounts and a lot of really great tools too. Not one sale of any of them was made to anyone. No-one even looked at them.

People ain't working and they fer sure aren't in the market for more tools for their trade - in fact they wanted to put some of their stuff in the pile too on a sales contingency.

Yup it's a Biblical situation I'm sure - but I got a real reference for ya:: (Ezekiel 7:19) 19*“‘Into the streets they will throw their very silver.*.*.

I see big 4WD trucks and boats and flat screens and home theater systems and even motorcycles on front lawns with signs that say: 'Take Over Payments' or 'Cheap - Best Offer' all over the place.

People need food and a roof first, then toys. This is why there's such grief on the retail level with failures and seizures of assets happening more and more ---- and it ain't done yet.
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I totally agree with this. I was the store manager for the Warwick location for the last 6 years of its existence (now you guys know who to blame if you had a "bad experience", but those of you who know me know I tried to treat everyone fairly. But I learned you can't please everyone all the time). During that time I saw sales on big ticket items fall. People didn't have money to buy a new guitar, amp, or PA system (with the exception of QSC K series speakers..... those sold like hot cakes, which is a testament to how good they were). Most people were buying accessories and little things. It was just the nature of the economy.

I will always look back at my time with Daddys fondly (13 years with them). Like with any job, there were good times and bad. I made alot of good friends while working there. I learned alot about the music business and about communication in general. I do wish that the company listened more to the employees at the store level, who had a better view of what was going in out there. I also wished we as employees spoke with a louder voice to be heard by management.

I look toward to seeing what Fred does next. I have a feeling (and a hope) that we haven't heard the last of Daddys.
 
#96
Hey Mark....Lester here!

I always preferred going to your store over that the other place up the on the hill. ALWAYS got treated right and always felt that I got a good deal....new or used.

Interersting observation of Fred........

Shortly after your store closed, I e-mailed them and asked them to reconsider and reopening in a different location with a lower rent. Maybe specialize in used gear.

Don't know how many of you from RI remember this but, back in the 70's, there was a music store in Apponaug called Musicians Exchange. They sold new accessories like strings, cases, stands, etc.........but literally all of their instruments were either on consignment or taken in trade for another instrument in the store. They were quite successful at it for a long time. They eventually branched out into arranging entertainment and lighting for weddings and the like and gave up the musical instrument exchange business.

Not that my e-mail really matters but, I hope your right. I'll bet there's a decent market out there for good, used gear and, with Fred's experience in dealing with used gear, it would be great to see a "rebirth" of the Daddy's name.
 
#97
I wonder about all the customers that paid extra $$$ for a longer warranty or Daddy's trade-up program. Caveat Emptor I guess... I never went for those kinds of "extras". Always figured if I was buying a quality product I'd be able to get most of my money back on the used market and if I thought it was going to break in a year or two I would not buy the product in the first place. Daddys RIP! IT'S THE OBACONOMY STOOPID!
 
#98
From nashuapatch.com

"UPDATE: ALL UNCLAIMED CUSTOMER-OWNED ITEMS WILL BE SENT TO MANCHESTER STORE WAREHOUSE ON CANDIA ROAD.

FROM DADDY'S JUNKY MUSIC FB PAGE:

OCT. 31

"GE Capital is in possession of or in the process of taking possession of all Daddy’s inventory with the exception of customer owned repairs."

RIP Daddys! You will be missed!!!
 
#99
gnjpowell said:
I wonder about all the customers that paid extra $$$ for a longer warranty or Daddy's trade-up program. Caveat Emptor I guess... I never went for those kinds of "extras". Always figured if I was buying a quality product I'd be able to get most of my money back on the used market and if I thought it was going to break in a year or two I would not buy the product in the first place. Daddys RIP! IT'S THE OBACONOMY STOOPID!
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Most likely we will see a class action lawsuit initiated in the near future. There was a contract, and now that contract is not able to be fulfilled. Lawyers will have to be involved and it will most likely take years to figure out.

Personally, I would just cut my losses instead of dealing with that hassle.
 

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