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If Fender Went Belly Up...

#81
To answer your question, if I could play anything I wanted, it would be custom. Common everyday bass would be Ibanez.

Going to the rest of the thread...
awilkie84 said:
I'm pretty sure people said this about Oldsmobile, Pontiac, Plymouth, AMC, Mercury, etc. Where are they now? Oh right! They're defunct & out of production. :P

My personal take, answering the OP's original question of "what would you play?" and not "do you think this would ever happen to Fender": Spector. I already do & prefer them to my Fenders.
Click to expand...
To me this is not the same as Fender going out of business. These companies are subsidiary brands. They ran until demand for them weakened.
Most of the time, either a smaller company that is willing to take a smaller profit than the current owner will buy it out, or it will be absorbed by a larger conglomeration that feels it can make the brand more profitable.

Is Fender too big to fail? Not in the U.S., I think they would be bought out by owners from a country more invested in the manufacturing of their cash cow. They could then still build basses in the States.
 
#82
oleskool said:
To answer your question, if I could play anything I wanted, it would be custom. Common everyday bass would be Ibanez.

Going to the rest of the thread...

To me this is not the same as Fender going out of business. These companies are subsidiary brands. They ran until demand for them weakened.
Most of the time, either a smaller company that is willing to take a smaller profit than the current owner will buy it out, or it will be absorbed by a larger conglomeration that feels it can make the brand more profitable.

Is Fender too big to fail? Not in the U.S., I think they would be bought out by owners from a country more invested in the manufacturing of their cash cow. They could then still build basses in the States.
Click to expand...

They became subsidiary brands before being phased out. Originally, they were big standalone names. Hell, Olds put out the first Automatic transmission.
 
#90
I agree with JimmyM this thread is pointless. Fender was not able to go forward with its IPO but the company is again profitable. Not very profitable but profitable nevertheless.

It's Guitar Center that worries me. The company has $2B in sales but $1.6B in debt and a worsening bottom line. The company lost $237M for their fiscal year 2011. They have some big notes due in April and will have to further increase their leverage with some short term financing.

It's obviously bad for them but bad for us as consumers. As much as we love to bash the big guys they are the only place where you can go test gear in many key markets.
Many intendants have disappeared and even in a big metropolitan area, you can often count them on the fingers of one hand.
If GC/MF disappears or undergo some dramatic restructuration, where will we try and buy our gear from?
 
#91
I've decided to let my 75' P-Bass rest in its case. I respect that bass. It does have mojo. It would be unfortunate if Fender went belly up. But my G&L L-1505 does better for me in every way: price, craftsmanship, available ordering options, Fullerton CA factory location, customer service and tone. I've got alot of respect for Leo Fender's designs. Fender won't go belly up.
 
#93
Laurent said:
I agree with JimmyM this thread is pointless. Fender was not able to go forward with its IPO but the company is again profitable. Not very profitable but profitable nevertheless.

It's Guitar Center that worries me. The company has $2B in sales but $1.6B in debt and a worsening bottom line. The company lost $237M for their fiscal year 2011. They have some big notes due in April and will have to further increase their leverage with some short term financing.

It's obviously bad for them but bad for us as consumers. As much as we love to bash the big guys they are the only place where you can go test gear in many key markets.
Many intendants have disappeared and even in a big metropolitan area, you can often count them on the fingers of one hand.
If GC/MF disappears or undergo some dramatic restructuration, where will we try and buy our gear from?
Click to expand...
There's always Sam Ash. And maybe the local mom and pop stores will come back? And Bass Central's 20 minutes from my house. But they have a small showroom and someone's always on the phone shushing you when you try out gear there. Maybe if GC hits the bricks, Beaver will make enough money to expand the showroom and put the phones in another room...

;)
 
#94
I worked for an "American Icon" company in the hobby industry.

After manufacturing in the US for many years, they decided to start manufacturing overseas, and found a Taiwan company (one that could not seem to get a foothold into the American market by itself after years of trying) that was more than willing to make products for us.

When the original owners of the "AI" company wanted to retire, they sold out to that same Taiwanese company, who retained and use the original name to this day.

Analogy: Cort could take over Fender, not missing a beat.
 
#95
Laurent said:
It's Guitar Center that worries me. The company has $2B in sales but $1.6B in debt and a worsening bottom line. The company lost $237M for their fiscal year 2011. They have some big notes due in April and will have to further increase their leverage with some short term financing.

It's obviously bad for them but bad for us as consumers. As much as we love to bash the big guys they are the only place where you can go test gear in many key markets.
Many intendants have disappeared and even in a big metropolitan area, you can often count them on the fingers of one hand.
If GC/MF disappears or undergo some dramatic restructuration, where will we try and buy our gear from?
Click to expand...

This has kind of happened in Australia with Allans Music and Billy Hyde. Both were reasonably sized music instrument chains. Allans bought out Billy Hyde to create Allans Billy Hyde, which held 25% of the market and had stores in most major cities and a few regional centers when it went bankrupt last year and sold off all stock for ridiculous prices to help pay a $13.5 million debt, but even then staff missed out on around $3 million in entitlements.

All but the largest few of their stores are still closed as far as I know, and a music importer by the name of Col Gallin bought it all out after negotiations with the administrators went south at the end of last year. Some stores are still trading and an online store is on the way.

This guy Gallin apparently understands the business like we do and has said the the downfall of Allans has to with, apart from a general retail slump, the fact that it never marketed itself at professional musicians. Sure, some of the stores stocked higher-end gear, but the customers who were interested in this gear knew more about it than staff did - they probably had a better idea of street prices, too, so took their money elsewhere.

We'll see how it goes. Australia has a number of specialist bass retailers (Bass Centre, Bass Gear Direct, Thump Music, and until recently Bass People) who stock a better range of bass gear than Alllans ever did, and who I now their stuff better. I'm still happier to go through those guys, but I'll always go for a good deal ;)

As for Fender, yeah, so long as the company doesn't sell itself into oblivion before anyone (probably a conglomerate) can step in and buy them out, there will always be a Fender company producing instruments that look like Fenders.
 
#96
M.R. Ogle said:
Analogy: Cort could take over Fender, not missing a beat.
Click to expand...

Exactly.

Fender haters? Sorry, you won't get this "belly up" wish in your life time, nor will your children, nor their children, nor...

Fender fans? We already know that any factory, anywhere in the world, can be equipped and trained to produce high-quality instruments. Your brand is safe for your lifetime, and your children's, and thier children's, and...
 
#99
FourBanger said:
Isn't one of Fender's troubles that they are owed a ton of money from Guitar Center?

Wow, maybe instead of somebody buying the Fender name, Fender becomes a controlling creditor of a bankrupt Guitar Center.
Click to expand...

Yes of course Fender has to be holding huge receivable with GC. I am not an industry insider but I would assume it's somewhere in the range of Fender half-annual profit best case scenario or annual profit if their credit policy has been loosey-goosey.

Now, whatever happens, Fender will never become a controlling creditor of GC. Their receivables have to be in the 1/2 to 1% range of GC debt, less if they have been careful. So it's not enough to control anything under any circumstance. When a large partner files for bankruptcy, you just get hurt bad.

This is partly why Fender's IPO's did not go through last year. Share price was too high and investors realized Fender's dependancy on GC was too high.

When it comes to independents picking up this business, it’s possible but the scale is huge. If you assume your independent store average size is $5M, it would take 400 stores doubling their business volume to make up what GC does annually. Even if only half the chain is wiped out in a restructuration plan, that’s still a boatload of volume.
 

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