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Guitar Center Files for Chapter 11 Bankruptcy

#61
John Stephen said:
Interesting for me to hear the perspectives here, that venture capital firms ruined them. I always thought it was simply a case in which GC expanded too much too fast. But I guess the capital firms played a role in that.
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VULTURE, not venture. Venture capital is what you get as a startup. "Vulture" capital firms, like Bain and Ares, generally operate on a model of buying distressed companies and, in theory, trying to turn them profitable, usually by cutting costs. In practice, they do not often behave this well, and buy companies, gut them, sell off what pieces they can, and abandon the companies with staggering debt. Toys-R-Us is a good example of this process in action.

I have mixed feelings about GC. There are two that are about equidistant from me, and one is actually quite good. They have a decent selection, keep the stuff in reasonable shape, and while they're not always knowledgeable, they at least try to be helpful, and if they're not busy they're pretty patient.

If GC were to go away completely, then I'm not sure where I'd get to try out gear in person. I'd be happy to shop at mom & pop places, except there aren't any anywhere near me. If GC went away, would someone come in and fill the need? Maybe, but I'm not convinced. I kind of hope they can work through this and stay around.
 
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#64
SunByrne said:
VULTURE, not venture. Venture capital is what you get as a startup. "Vulture" capital firms, like Bain and Ares, generally operate on a model of buying distressed companies and, in theory, trying to turn them profitable, usually by cutting costs. In practice, they do not often behave this well, and buy companies, gut them, sell off what pieces they can, and abandon the companies with staggering debt. Toys-R-Us is a good example of this process in action.

I have mixed feelings about GC. There are two that are about equidistant from me, and one is actually quite good. They have a decent selection, keep the stuff in reasonable shape, and while they're not always knowledgeable, they at least try to be helpful, and if they're not busy they're pretty patient.

If GC were to go away completely, then I'm not sure where I'd get to try out gear in person. I'd be happy to shop at mom & pop places, except there aren't any anywhere near me. If GC went away, would someone come in and fill the need? Maybe, but I'm not convinced. I kind of hope they can work through this and stay around.
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RE: Vulture Capital

Very descriptive and spot on!
 
#66
Jason Garrett said:
When you smash perfectly salvageable equipment all the time and throw in your dumpster karma is going to catch
Up with you. There is a lot of energy in musical instruments. Musicians put their heart and souls into playing. Have you seen the YouTube videos of GC dumpster dives. They are horrible to the equipment. A bunch A-holes the lot of them. I purchased a used Squier jbass from the local GC here in Sacramento a few years ago and it had a tuner that would rattle. I brought it back under the warranty and they had it for a week and claimed they couldn’t get the part to fix it ***?? So they offered me a refund. I was shocked but ended up buying another bass they had on sale on the new rack. I walked back in the next day and asked for the manager and told him I would be willing to buy that rattling bass as is and fix myself for a discount because I enjoyed the tone of it and he told me it was gone. Another employee overheard me and and said yeah we smashed that red bass last night. I promptly returned the new bass I bought the day before and From That day forward I have never stepped foot in there again. Instead of selling me 2 basses they sold me none. I goto a local small shop here Skips music instead.
GC gets what they deserve. Bye bye GC
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Well, most of our national retailers do that also.......Walmart, Lowe's, Home Depot, etc. So I supposed you don't do business with them, either?;)

In retail, the business method is to throw out merchandise that is more costly to repair or sell at discount. Then the business gets to use it as a tax write off.
 
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#67
N0sferatu said:
I won’t ever buy anything from then again.

I think their problem is mostly crappy sales people, I had a salesman in the Reno store and I was ready to walk out the door with a new bass and a head. The guy had a I don’t give a poopie attitude. So I ordered my Bass and head from Sweetwater and it came right to my door.

So I really don’t give a crap if they fall off the face of the earth.
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And you can have that same service at a Lowe's or Home Depot, or Walmart or any other major retailer. Still shop with them? It is individuals at individual retailers that piss customers off. You really can get satisfaction by having a "calm" conversation with store management and/or corporate.

I have had to deal with lousy service lots of times. I usually get my satisfaction in making the person giving me lousy service miserable. That doesn't prevent me from still shopping at a retailer.
 
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#69
Splash7 said:
?
Well, most of our national retailers do that also.......Walmart, Lowe's, Home Depot, etc. So I supposed you don't do business with them, either?;)

In retail, the business method is to throw out merchandise that is more costly to repair or sell at discount. Then the business gets to use it as a tax write off.
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Yeah, I try not to do business with companies that do this. Unfortunately, they are hard to avoid since this approach has been normalized. Doesn't make it ok.
 
#74
The real shame about the situation with GC is that once, back in the Mesozoic era, going to the Guitar Center in Hollywood was a real treat for alot of us.
A day trip to Guitar Center, Nadines rare guitars, and Tower records was like a pilgrimage for us dirty nosed farm boys from out of town back then.
Once and awhile you'd even see big name players shopping there.
Heavy sigh...oh well... all things must pass. :(
 
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#77
First, the problem with Venture capital is that Venture Capital has NO IDEA how to do retail. They do pretty well on Tech companies, Health care, and OEM production. Lindkin wouldn't exist if it wasn't for a venture capital take over. Those are fairly high margin business's. Brick and Mortar retail is just the opposite. The cost pressures are huge, between rent, inventory costs, HC and payroll you have to make every decision just right. And with multi-location retail a few poor producing locations will destroy any chance of company success.

As far as those complaining about "poor service" from GC, are you willing to pay $600 for a Fender Squire? You'd probably get great service, a great set up, and a salesperson who knows their stuff. The problem is this industry like ALL of retail is full of people who shop for price only. Most of us are more than willing to sacrifice quality of service for a great deal, so maybe we shouldn't complain about it. Because payroll is by far the most controllable cost a retailer deals with.

I use to work part time at Gander Mountain ( a company that should be a case study in how NOT to run a multi-unit retailer). I remember they cut payroll to the bone and some mournings we would open up a 50,000 sq ft store with 5 employees on the floor. When we had gun sales people would line up for the great prices, they all complained (firearms sales is very customer service intensive), but that lack of service didn't send them to the local gun shop to pay 29.99 more for $500 plus firearm.
 
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#78
burk48237 said:
...are you willing to pay $600 for a Fender Squire [sp]? You'd probably get great service, a great set up, and a salesperson who knows their stuff.
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You can't even get that with a $2000 bass, why would you expect such with a $600 Squier (note the correct spelling ;)).
burk48237 said:
I use to work part time at Gander Mountain ..... some mournings [sp] we would open up a 50,000 sq ft store with 5 employees on the floor.
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We are all morning [sp] :D for your having to do that? ;)

There were lots of times I was the only one (normally, there were three, sometimes, four) in my area of the camera shop (professional photographic equipment, professional lighting, and darkroom) I worked at in the '80s in Los Angeles, with a line of professional (and, otherwise) clients patiently waiting for me to take care of them, many of whom you would recognize by name. Plus, the way more than many times I worked alone at the photo lab later on (1991-2012). I had to take care of clients at the door and on the phone, in addition to spending my idle time in the darkroom making custom prints, and processing film (note; it's pretty difficult to answer the phone or door when you're locked in a small room processing film by hand in the dark). ;)

But, I get your point. :)
 
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#79
Jeff Scott said:
There were lots of times I was the only one in our area of the camera shop (professional photographic equipment, professional lighting, and darkroom) I worked at in the '80s in Los Angeles, with a line of professional (and, otherwise) clients patiently waiting for me to take care of them, many of whom you would definitely recognize by name. Plus, the way more than many times I worked alone at the photo lab later on (1991-2012). I had to take care of clients at the door and on the phone, in addition to spending my idle time in the darkroom making custom prints, and processing film (note; it's pretty difficult to answer the phone or door when you're locked in a small room processing film by hand in the dark). ;)
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But they all went to purchasing online.
 

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