I remember the GCs in Cali were smaller and full of high end stuff, the ones here is Connecticut have been full of garbage since they first opened.
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So, what if Guitar Center DOES go under...
- Thread starter Michedelic
- Start date
I remember the GCs in Cali were smaller and full of high end stuff, the ones here is Connecticut have been full of garbage since they first opened.
At least is they fold they won't do it in the middle of the night and steal everyones gear and money like the scumbags at Daddy's Junky Music!!!
Know people who are still trying to recover thier instruments and money.
Seriously scumbags-take money for deposits on the last few days knowing they were closing, not telling their employees, clearing out the store in the middle of the night-
Those responsible should be in jail.
Know people who are still trying to recover thier instruments and money.
Seriously scumbags-take money for deposits on the last few days knowing they were closing, not telling their employees, clearing out the store in the middle of the night-
Those responsible should be in jail.
SirMjac28
Patiently Waiting For The Next British Invasion
+1 80% of their customers aren't looking for a Zon or an Alembic it's parents and grandparents looking to shut their kids up about wanting to learn the guitar after watching some other kid on YouTube and they don't want to be out thousands of dollars for a two week hobby. If selling high end instruments was so lucrative why stop? they didn't become the number one brick and mortar retailer by accident.
No doubt; but anyone who sells to Guitar Center on credit (or lends to Guitar Center) knows the risk due to their junk bond status.
The point is, it's no secret. Ideally Fender wouldn't get into this situation, where such a large proportion of their sales is due to a single customer. That's dangerous.
But they have options. For example, Fender can do the same thing that Goldman Sachs does, and take out a credit default swap against Guitar Center Holdings, so they can recoup their losses in the case that GC defaults.
Here's what GC an Sam Ash have done to my whereabouts:
German Village Music Haus..the only store in town that sold high end, (Spector, Alembic, G&L, SWR, Rickenbacker, Paul Reed Smith, Pedulla, EMG)
Now they have a couple 70's Made in Japan Teisco's hangin' on the wall.
Lang Music(used to get the pick of the litter from Fender) Gone.
KRA(discount Fender, Ibanez, Crate, Ampeg, the guy had some kind of deal going with these companies and it was very convenient) Gone.
I always buy used, anyway. I just hate to see these shops that I grew up with close.
German Village Music Haus..the only store in town that sold high end, (Spector, Alembic, G&L, SWR, Rickenbacker, Paul Reed Smith, Pedulla, EMG)
Now they have a couple 70's Made in Japan Teisco's hangin' on the wall.
Lang Music(used to get the pick of the litter from Fender) Gone.
KRA(discount Fender, Ibanez, Crate, Ampeg, the guy had some kind of deal going with these companies and it was very convenient) Gone.
I always buy used, anyway. I just hate to see these shops that I grew up with close.
Yeah, that sucks; but I guess I've been lucky. I've found some real gems there, especially used gear. Just a few examples: New Highway One P for $425; Honey Blonde Classic '50s P for $315; new '08 Am. Std. Jazz for $499. And most of the guys at my local GC are pretty good. Courteous and helpful without being pushy. Of course there have been some ***** over the years, but you tend to deal with the guys you know.
I buy used (and from TalkBass) whenever possible, but having a GC nearby is nice. Especially when you stumble across a good deal. But you have to do your homework and be ready to jump if you find one.
GC goes down, takes a bunch of manufacturers with it. This closes many small, local stores because they can't get inventory. Prices shoot way up for everything, cutting down on the number of new musicians. Market stops being saturated with way too many crap bands willing to play for free... and I'll let you fill in the rest from there.
Yeah, it's a longshot, but it's there.
Yeah, it's a longshot, but it's there.
Guitar Center didn't take them out; the Internet did that. GC is in the same boat as many of the local shops were. They just haven't gone down yet; as long as they're able to keep raising money, they'll keep going. Smaller stores had their loans called years ago, which is why they went first.
The Internet has transformed virtually every single re-seller marketplace, and local brick-and-mortar outfits have had to face competition they'd never had before. While some items are impractical to ship and therefore relatively safe from this competition, everything else has succumbed to Internet sales pressure: books, computers, music instruments, music, etc. Local specialty stores which once enjoyed healthy customer bases because they offered the best selection in town now realize that their "best in town" selection and prices are no longer compelling when they have to compete against the "best on the Internet".
When you see local stores close, and some of them get replaced (at least temporarily) by larger chains, you're just observing a portion of the larger trend where the stiff competition is forcing some consolidation amongst brick-and-mortar resellers.
Whether this change is good or bad depends on your perspective. Consumers like the (generally) lower prices and much better selection, and even the convenience and low-pressure shopping experience. Store owners (and employees) fundamentally don't like having to compete with literally every other store on the Internet, because they know there is probably someone out there willing to accept lower margins, and they'll lose the sale.
Frankly, from my perspective, none of these stores is worth too much heartache, as they didn't really offer that much value-add to the system. Yes, they are local, but they are fundamentally just re-sellers. If they were manufacturers, or service vendors, I would be sorrier to see them go. For every amazing music store with great prices and killer staff, there were many more mediocre stores with terrible selection, horrendous mark-ups, and incompetent staff.
If I wanna buy something, I'll go to GC over online any day. I want to take any bass I'm considering buying for a test drive before I purchase.
All's I know is the GC and Sam Ash stores in my town are always busy, while the other's slowly had less and less activity.
I never thought people would ever buy a musical instrument(especially one as destructible as a bass guitar) online, without first playing it. If somebody stood in front of you with a bass and purposely dropped in on the floor a couple times, took it outside of the store to the heat or extreme cold...would you then want to pay a new price for it? Not me. At least a store has time to inspect a new instrument. All the used instruments I've bought were from trusted people.
The only benefit of these huge stores is to people like me, that don't buy new instruments. Those stores tend to have special sales on strings and cables. The local stores would always charge full price on that stuff.
I never thought people would ever buy a musical instrument(especially one as destructible as a bass guitar) online, without first playing it. If somebody stood in front of you with a bass and purposely dropped in on the floor a couple times, took it outside of the store to the heat or extreme cold...would you then want to pay a new price for it? Not me. At least a store has time to inspect a new instrument. All the used instruments I've bought were from trusted people.
The only benefit of these huge stores is to people like me, that don't buy new instruments. Those stores tend to have special sales on strings and cables. The local stores would always charge full price on that stuff.
Unrepresented
Something Borderline Offensive
Just out of curiosity, where do you believe that retailers are receiving merchandise from that's significantly different from internet ordering? They all get shipped on the same trucks regardless of whether it stops by the retailer first or goes directly to your house.
I have no idea how this fits into this discussion, but I've been into a couple of stores in the greater Detroit area that are like warehouses. They seem to be local stores, but I could see them filling the gap if GC were to go under, which I hope doesn't happen.
First of all, Romney had cut all ties with Bain by August 2001, about 6 years prior to the GC acquisition (even earlier if you count his leave of absence for the Olympics starting in 1999). Citing his name here is nothing more than a baseless political smear.
Second of all, calling the Guitar Center acquisition "vulture capitalism" demonstrates a pretty serious lack of understanding of scenarios where that term is more applicable. This buyout was neither a "hostile takeover" (Guitar Center management approved the deal, as did shareholders), nor did it involve liquidation of assets. By all accounts, Bain wants the company to succeed.
This was a pretty straightforward public-to-private leveraged buyout (LBO) deal that just hasn't really panned out. At the time of the deal (mid-2007), everything looked good on paper. The resulting debt ratio needed to go private seemed very manageable ($2.1 billion to go private, vs. operating profits in the ~$70 million range). But the subsequent recession starting in 2008 hit Guitar Center's sales substantially, and now the company is worth considerably less than the $1.9 billion raised to purchase it, and its operating revenues struggle to service the purchase debt, not to mention operating debt.
That's a worst-case-scenario for the financial sponsor of an LBO (e.g., Bain), and certainly not what they wanted to happen. Bain was almost certainly hoping to have sold off Guitar Center Holdings at a profit by now, rather than struggling to keep it afloat. Many analysts have suggested that if it weren't for Bain's reputation being attached to Guitar Center Holdings, they wouldn't even be able to borrow any money right now to try to stay afloat.
This is just an example of the volatility involved with taking risks based on past performance. Here a group of investors (e.g., Bain) thought they could buy the company from public shareholders and turn it around for a nice profit, but they simply over-estimated the company's future potential (or under-estimated the risk, either way). Goldman Sachs, who floated the LBO loan, stands to take the biggest financial hit if the company defaults. They can hedge against taking a catastrophic loss by paying for a credit default swap insurance premium, which they almost certainly have already done. But collecting that policy would almost certainly not recoup their investment, so they would much rather see Guitar Center succeed too and see their loan repaid with interest.
The only people who want to see Guitar Center fail are those who have purchased credit default swaps against GC but have no capital at risk (pure speculators), and of course GC's competitors. Both Bain and Goldman-Sachs have a strong incentive to see GC succeed. Suggesting otherwise is simply ignorant.
Just out of curiosity, where do you believe that retailers are receiving merchandise from that's significantly different from internet ordering? They all get shipped on the same trucks regardless of whether it stops by the retailer first or goes directly to your house.
Yeah, but that store has time to decide yay or nay if should be demonstrated to the public.
I live in the sticks.
I've never been in a Guitar Center, however I did see a sign for their store while riding down the freeway once.
If they go under......... I don't care one bit.
I've never been in a Guitar Center, however I did see a sign for their store while riding down the freeway once.
If they go under......... I don't care one bit.
I bought a 2009 Fall Limited edition Taylor 414ce at GC in Wichita last fall for $448. If GC goes out of business, it'll be from deals like that!
Maybe if they didn't have a 200% mark up on everything they sell, they would probably be in better shape! I may not notice if they capsize!
GC is a victim of their own devise. They have survived for many years with a very low profit margin. They forced the manufacturers to cover spiffs and incentives for employees who for the most part are frustrated musicians who have little if any business common sense.
The affordable care act will take its toll in all retail businesses. GC has a target on its back.
The affordable care act will take its toll in all retail businesses. GC has a target on its back.
