So, what if Guitar Center DOES go under...

[Michedelic]

I realize that realistically the investors or the board won't let it happen completely, but then again Borders Books limped along for a long time before it fell. JC Penny is wobbling; they weren't doing too well, then they did that weird pricing thing that really damaged their PR. Best Buy, are they on life support yet? Anyway...will GC throw their Starbucks-like expansion in reverse, closing a big number of stores? Shave their inventory down to convenience store variety, &/or folding it all into Musicians' Friend? How much is Fender gonna get hurt? Will there ever be a resurgence of the mom'n'pop, especially if GC would severely downsize or dissapear? Or has the internet totally destroyed brick & mortar music retailing? Let's hear some theorizing...

 

[prd004]

GC started their own demise by concentrating on selling to the bottom feeders, starter packs, entry level instruments and such.
They did this successfully for years, but by focusing on these customers they effectively alienated the mid level and high end customers.
In the 90's my hometown GC had a high end guitar room, a PRS wall, a Gibson wall, a bass department with multiple custom shop Fenders, rickenbackers, warwicks, Zons, cool amps, lots of vintage gear, etc.
The starter packs and cheapo guitars can be bought online just about anywhere for the same price, without leaving your desk.
I think GC painted itself into a corner that eventually leads to a dead end.

 

[sjeverett]

Would GC going under be the demise of Musicians Friend as well? They are pretty much the same company, share the same warehouses etc.

 

[M0ses]

Would GC going under be the demise of Musicians Friend as well? They are pretty much the same company, share the same warehouses etc.

I doubt it, I'm pretty sure MF is doing really well. Online retailers aren't the ones struggling these days.

 

[JennySuzuki]

I imagine there will always be mom & pop shops, because luthier work is a service that can't effectively be offered over the internet. In fact, Invalid Link Removed (their prediction of five technologies that will explosively take off in the next five years) includes a resurgance of local purchasing over electronic purchasing because of services that can't be effectively offered online.

If your Mom & Pop survives the next couple of years, stays with the developing techonologies, I'd say they stand a good chance of making it long-term.

As for Guitar Center? Who knows. A lot of chain stores aren't doing so well.

 

[Unrepresented]

I don't believe that Guitar Center will completely go under, but I suspect that they may shift from selling merchandise to being primarily a showroom for all the internet/catalog shopping companies that are under the greater Guitar Center/Musician's Friend/Music123 umbrella. The showrooms will be a loss leader, but they'll support the online sales.

That's the way retail seems to be heading in my opinion, anyway.

 

[Michedelic]

Would GC going under be the demise of Musicians Friend as well? They are pretty much the same company, share the same warehouses etc.

Of course not! GC, Inc. purchased MF just to cover all aspects of selling musical gear to people(and to thwart competition). Get 'em one way or another. There's always going to be parts of the country(or the world, really) where there's no access to an actual GC with no other retail alternatives, and internet(formerly mail order)sales service that market. Where did most of the record stores go(even though they were technically selling CD's)? Downloading off the internet has killed most of them off. Most of them that still exist(besides the humongous Amoeba outlets in SF and LA)are like precious little specialty shops, surviving on vinyl sales and dwindling used CD proceeds. If anything, Ebay, Amazon, and other internet outlets have left the brick & mortar retail business model behind in the 20th century. This shouldn't be late breaking news. Granted there will always be a customer need for 'touching and feeling', but the majority of GC/MF customers are going to be buying Squiers, not Sadowsky's. GC/MF has their return policies in place. Correct me if I'm wrong, but isn't Music123 a part of GC also? Same warehouse address in Kansas City, MO as MF. It seems that the M123 'brand' is just a cynical pseudo-competitor ploy that gives off the false impression that there's an 'alternative' to MF. No, GC is well poised to continue online if the retail stores wither.

 

[shadowtippy]

I bought a strap from GC. That's my only purchase from them, so I am not all that concerned about them. If they goo out of business, I may not even notice.

 

[Gorn]

I love em for used basses. I check out http://used.guitarcenter.com/usedGear/index.cfm?srch&category=38 almost every day. It'll suck if they go under.

 

[Mike M.]

I hope they don't go under. I say that as a member of the unemployed and would hate to see that many more people out of work.

 

[spade2you]

I've only spent a few bucks at GC. I typically use MF for stuff my local shop doesn't carry.

 

[Jeff K]

I'm sad ANYtime a guitar shop goes out of business, be it a big chain (like MARS Music) or a Mom & Pop. My philosophy is "the more the merrier". I've found a lot of great deals at GC over the years. I might not buy there very often anymore, but you just never know what you might find. Plus I have one within 5 minutes of my house. I'd hate to see it go under...

 

[fisticuffs]

I realize that realistically the investors or the board won't let it happen completely, but then again Borders Books limped along for a long time before it fell. JC Penny is wobbling; they weren't doing too well, then they did that weird pricing thing that really damaged their PR. Best Buy, are they on life support yet? Anyway...will GC throw their Starbucks-like expansion in reverse, closing a big number of stores? Shave their inventory down to convenience store variety, &/or folding it all into Musicians' Friend? How much is Fender gonna get hurt? Will there ever be a resurgence of the mom'n'pop, especially if GC would severely downsize or dissapear? Or has the internet totally destroyed brick & mortar music retailing? Let's hear some theorizing...

I don;t think Brick and mortar will ever be what it was. Already though some shops have done a good job of doing a great brick and mortar with a great web presence. Chicago Music Exchange comes to mind.

I think that when the shoe drops GC/MF will just restructure, claim bankruptcy etc. Privat equity will make out like a bandit, everyone else will be left holding the bag. I would think they will exist afterwards. Maybe MF will be separate, probably not. I could see half or more of the stores shutting down, a big fire sale that will kind of screw me over for a few months but then just more options for everybody. Not a lot of industries are as dominated by one company like Musical Instruments are. I don't think it's healthy for the retailer, manufacturers or customers.

 

[Savage_Dreams]

makes no difference to me. they carry nothing i want nor give any service i need. the most i ever stop in for is the occasional bag of picks.

 

[Mvilmany]

It will make no difference to me personally. GC can wither.

 

[Savage_Dreams]

I'm sad ANYtime a guitar shop goes out of business, be it a big chain (like MARS Music) or a Mom & Pop. My philosophy is "the more the merrier". I've found a lot of great deals at GC over the years. I might not buy there very often anymore, but you just never know what you might find. Plus I have one within 5 minutes of my house. I'd hate to see it go under...

maybe i just have a crappy one in my area, but the problem is i know exactly what ill find in there every time! the same basic models in the same basic colors, every time. i havent seen anything on the wall there to excite me in years.

 

[invader3k]

The last time I went into one was a few months back. I was looking at buying a JamHub. I asked a guy behind the counter if they had them.

"Oh yeah, those are awesome...but we only sell them online."

I said "OK," and proceeded to browse the rather "blah" selection of basses they had. Then drove back home and bought a new Jamhub off eBay.

 

[1958Bassman]

Would GC going under be the demise of Musicians Friend as well? They are pretty much the same company, share the same warehouses etc.

That would reduce their recurring costs greatly, although they would have to hold a ginormous inventory reduction sale in order to avoid the need to store what wouldn't be liquidated. I doubt the manufacturers and suppliers would take much of it back and definitely for less than GC paid. If they file for reorganization, which is about the only way Fender and their other large suppliers would survive, in light of the accounts receivable, the liquidation sale might pay back a decent amount of what is due, but it would still do a lot of damage. Bain Capital screwed the pooch on GC and if they do close, I would expect them to swoop in and buy some companies.

In the big picture, I doubt the money they paid for the Clapton guitars and others they paid a premium for will bring in 100% of what they paid unless Paul Allen comes in.

 

[nukes_da_bass]

The way gc makes you have an address on file simply to purchase a pick or an instrument cable turns me off. Let's see- they put almost all the mom and pops around here out of business and have no interesting amps or axes in stock.
The only downside is the giant stable of mediocre musicians who will suddenly be unemployed and looking for gigs

 

[Kmonk]

I worked in retail management from the mid 80s to the mid 90s. When companies struggle, they cut inventory and payroll. As a result, shoppers can't find what they want and kind find employees to help them. The downward spiral begins and eventually they go out of business. Here in New England, we have seen regional retail chains such as Zayre, Ames, King's, Rich's, Bradlees, Caldor, Filene's and many others go out of business. Most of them had hundreds of stores. There have also been many national chains which couldn't survive.

There are very few "mom and pop" music stores in my area. The ones that remain, basically follow the Guitar Center formula by stocking beginner instruments and little of anything else. There are 5 stores within an hour of my house and on any given day, you would be lucky to find 10 basses and 9 of them will be in the $300 to $500 range. On the rare occasion that they have something decent, they over price them. One local chain had 3 stores and now has one. The closest GC to me is 30 minutes away. The closest mom and pop is about 25 minutes. There are 3 GC stores within an hour drive. On any given day, they might have 30 basses. 75% of which will be MIM, Squiers, or entry level Ibanez. It's rate that they have an MIA Fender, MM or anything for the buyer who is interested in buying a higher quality instrument. The same is true on the guitar wall. Hundreds of guitars, most of which are Epiphone and MIM Fender.

The internet has changed everything. People no longer have to go to stores buy anything. Why pay the overhead of a lease, insurance, payroll, taxes etc, when you can warehouse everything and sell it online? I suspect that GC will close stores and the corporate focus will be mainly on Musician's Friend and Music 123 to sell instruments.