Guitar center wiped out!

[COYS]

Well, there are closing the Silver Spring store near me, but I’m sure it’s merely a coincidence.

I was commenting on the quoted post, which referenced the internet rumor that GC was going to close all stores and be online-only. There is no basis for that.

Closing an underperforming store is always something that a chain might do, but there was nothing ever mentioned that their plan for the future involved closing a lot of retail locations.

Guitar Center's problem was not revenue but the debt they were saddled with by previous acquisitions.

 

[/\/\3phist0]

I was commenting on the quoted post, which referenced the internet rumor that GC was going to close all stores and be online-only. There is no basis for that.

Closing an underperforming store is always something that a chain might do, but there was nothing ever mentioned that their plan for the future involved closing a lot of retail locations.

Guitar Center's problem was not revenue but the debt they were saddled with by previous acquisitions.

They had massive debt before the acquisitions. The issue is that the revenue was not there when the debts came due.
They expanded their physical store numbers at a time and most if not all did not operate at a profit.
Also, Bain Cap. sucked cash out and bailed.

 

[selowitch]

Guitar Center's problem was not revenue but the debt they were saddled with by previous acquisitions.

If there isn’t enough revenue to pay off that debt while also meeting expenses, is that not a problem of insufficient revenue?

 

[COYS]

They had massive debt before the acquisitions. The issue is that the revenue was not there when the debts came due.
They expanded their physical store numbers at a time and most if not all did not operate at a profit.
Also, Bain Cap. sucked cash out and bailed.

The problem was always the high debt load residual to the LBOs. This was reduced when the debt held by Ares was converted and Ares as a result became the majority owner. Things would have continued as they were but when the lockdowns came they were unable to service the interest on the debt, which forced them into bankruptcy.

Now out of bankruptcy, GC has reduced their debt by 2/3 and their emergence should indicate they have more than enough revenue to cover operating costs and service the debt. Notably, their filings showed 10 straight quarters of sales growth until the pandemic began.

 

[Plain Old Barry]

Mine outside of Philly was near empty too. Hopefully they pick back up. I know they get a lot of hate but the dudes at the one I go to are cool as hell for the most part. Have been for the better part of just over 20 years.

Same with Manchester, CT. Really easy to deal with, and very helpful when I had a mail order problem.

FWIW, I even found the two Manhattan locations easy and helpful.

I've worked in local music stores and a friend was the second generation owner of a small music shop. We still have some small shops, I don't get the vitriol directed at GC. GC (and Sam Ash, and Daddy's Junky Music back in the day) has always had a selection of new and used gear the small shops couldn't dream of, while the small shops do a great job with lessons, band and orchestral instruments, rentals, and repairs. There are also local stores that deal in vintage that GC or SA can't compete with service-wise.

Oddly enough, there's a good margin in lessons, rentals, and repairs, and you can't get any of them from mail order or Amazon. Know the market and thrive...

 

[DrayMiles]

Guitar center is neglecting their bass section...

 

[Matty Koff]

When I went to my local GC a month or few back, it was like a ghost town. Two employees, doors wide open. Not a single customer other than myself. Prior to the mess that was 2020, that store always had about 5-10 customers minimum when I walked in there with about 5-8 employees running around.

It's not that surprising to me honestly, given the bankruptcy thing, and the pandemic. I don't think I'd ever been the only customer in the local store before.

 

[zontar]

When I went to my local GC a month or few back, it was like a ghost town. Two employees, doors wide open. Not a single customer other than myself. Prior to the mess that was 2020, that store always had about 5-10 customers minimum when I walked in there with about 5-8 employees running around.

It's not that surprising to me honestly, given the bankruptcy thing, and the pandemic. I don't think I'd ever been the only customer in the local store before.

One time I was in Vancouver & spent some time checking out stores--all seemed healthy--except one (No GC in Canada)--it wasn't part of a chain either

There were three people in there--I'm not sure if it was 3 emplyess or 1 employee & 2 friend, 2 employees & one friend.

but they were very happy to see me walk in.

not much in stock--and I was really only there to buy picks or accessories & to see what stores there were like.

It later went under--but was later resurrected.

 

[Matty Koff]

One time I was in Vancouver & spent some time checking out stores--all seemed healthy--except one (No GC in Canada)--it wasn't part of a chain either

There were three people in there--I'm not sure if it was 3 emplyess or 1 employee & 2 friend, 2 employees & one friend.

but they were very happy to see me walk in.

not much in stock--and I was really only there to buy picks or accessories & to see what stores there were like.

It later went under--but was later resurrected.

The local GC is pretty much it in my area. You have a few other shops but they usually sell offbrand budget stuff or deal in used instruments.

 

[COYS]

View attachment 4132563 Guitar center is neglecting their bass section...

Surprised to see this, the GC stores here are not so picked over. Maybe there are supply issues in certain areas of the country and not others (or people buying up basses more there!)

 

[Metalbasspro]

Youtube reported that Guitar Center filed for bankruptcy but since it was on youtube I did not beleive it.

 

[buldog5151bass]

If GC had a dollar for every time someone here said they were about to go under, they wouldn't have any financial issues.

 

[bgartist]

My local GC has 9 basses, a full line of Markbass amps, and the same Ampeg SVT Pro 3 amp and 4x10 cab that’s been there forever.

 

[COYS]

Looking at GC’s website, the 4 stores in my area have a total of 59 distinct basses. Could have more than one copy of each bass I guess, but there are at least 59 across 4 stores. Seems a little thin for each store to only have about 15, but you can see what they have online before you actually visit.

 

[zontar]

Surprised to see this, the GC stores here are not so picked over. Maybe there are supply issues in certain areas of the country and not others (or people buying up basses more there!)

We had a short lived local store a few years ago--it's main claim to fame was that they sold Minarik guitars
If that's what you wanted--there was place to try them out & get them.

but it is a very niche market.

 

[chiplexic]

Anyone from the New England area remembers Daddy's Junky Music. That was a great brick and mortar network for used and new instruments and equipment. Craigslist killed them like Ford killed the horse carriage. As much as we like to curse GC, if they go out of business it won't be long before we're all talking nostalgically about them and the days of their stores stocked full of all the basses, cabs and amps. We're actually already doing that.

 

[COYS]

Anyone from the New England area remembers Daddy's Junky Music. That was a great brick and mortar network for used and new instruments and equipment. Craigslist killed them like Ford killed the horse carriage. As much as we like to curse GC, if they go out of business it won't be long before we're all talking nostalgically about them and the days of their stores stocked full of all the basses, cabs and amps. We're actually already doing that.

There’s no way Guitar Center is going out of business. As long as musical instruments are being made there will be a big box store selling them.

In any case they emerged from bankruptcy in December and the supply problems are with the suppliers.

 

[Corigan]

Went to two lately in a music store crawl., they were empty. I told the clerk that their store was "A sad state of affairs." He sounded confident they would be back up to speed. who knows.

As much as GC gets alot of criticism (their used gear practice sucks) they are convenient in a pinch. I had a band that crashed at my house. They were doing some shows with Megadeth. My dog decided the drummers in ear monitors would make a good breakfast. GC had the in ears in stock,I went and got a replacement pair, and the show went on without a hitch that evening.

Hoping GC makes it through their restructuring.

 

[rtslinger]

I agree with anyone who has mentioned the issue with getting shipments from over-seas
With the pandemic and Holidays. With shipping containers not getting delivered on the US side because of Covid,
there is a back log of shipping containers anchored off shore in many locations. Since they are here, but not being delivered. Those containers from overseas being held-up has affected GC.
Most likely GC is not able to place new orders since they probably have many open purchase orders due to this situation.

 

[Timmah]

My guess is that if GC is anything like most large-order retailers, there’s pandemic related supply chain issues all the way from Asian factories to stateside distributors, so it’s no surprise inventory is low. I’m sure the lesser foot traffic due to said pandemic also cuts down on the incentive to fill the showroom floors as well. With people buying largely online, it makes more sense logistically to keep your stock (especially higher-dollar or scarcer stuff) chiefly in the DC so they can mail it out efficiently to the customer, rather than shipping it to and from the store.

I’m pretty certain Fender and several other industry leaders actually reported a significant uptick in guitar sales last year (mostly driven by folks stuck at home picking up a new hobby), so I don’t think the market is dying as a whole. I’m sure GC’s online business looks a lot better right now than their brick and mortar- everyone’s does.

That being said, I’m gonna stop in at my “home base” store in Manchester CT today and see what it looks like. Color me curious.