Will Guitar Center actually fold?

What's good is "Internet presence" if you can't lower prices to be competitive and move sufficient units to make your nut? It's and even more price dependant market than your brick and mortar retail.
 
As Mark posted awhile back, about companies requiring a certain sales level to do business. This is nothing new. I can relate to it from a different hobby, that being model trains. I had a good freind of mine who opened up a hobby shop in the early 80's. It was trains exclusively, the idea being that he would corner the market in our area. And for a couple years he did very well indeed. There were a couple of hobby shops within say, a 30 mile radius of his, but they sold everything. Radio control planes, slot car kits, plastic model kits and all the tools & supplies to build 'em. The problem that he had (according to him) was mail order dealers. Even with shipping, he got beat on price for the bigger ticket items. And everyone dealt with the same two or three wholesale catalog dealers.

The story is that he wanted me to become a business partner after a few years. What happened was that he shot himself in the foot. I am so happy that I declined his offer. During the economic downturn in the late 80's he decided to try selling 'big dollar trains' in an effort to turn a better profit. These being Lionel & the then newer LGB trains. A simple set could cost someone 2-400 bucks. Right before the Christmas season in 1987, he bought a couple grand worth of these larger scale trains. Through January, he sold 2 Lionel sets and found no buyers for the LGB stuff he had.

Right around then, he put a shingle up on the store saying he was going out of business. His main wholesaler had just made a new policy. To order from them and get the normal discount, dealers would need to pay in advance and raise their sales a minimum of 12% a year.... meaning 1% a month to keep their discount. Anything less meant the discount was up for review, and that was every quarter at first. I remember once it took me 6 months to get a simple $50 order fulfilled. After that I stopped doing catalog orders. His going out of business sale lasted for 2 years.
 
I was at the Guitar Center Musicians Expo this weekend ... it's supposed to be GC's version of NAMM. The convention was pretty small and were mostly the usual big name vendors. They had a whole day set up just for GC employees yesterday, and they came around in packs from whatever store or region they were from. GC flew in employees from all over the country, who basically hung out, listened to vendor pitches they probably already heard before, and got catered lunch for free. I thought it was a bit lavish, given their financial situation. I wasn't there today, but apparently the open to the public day drew a lot of people and press.
 
Mark Wein said:
It seems like companies like Gibson and Fender would be severely impacted if GC were to go away.
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Gibson sure as hell would come down from their high horse and let mom and pop stores have the gifted pleasure to be allowed to carry their products again without having to buy a million dollars worth of stock per year. Fender pulled the same thing, but not nearly as bad as Gibson a year ago. That is a shame that they think that they are so good that they have to do that, but every dog has their day.

I would rather buy an old used Gibson than anything that they make and sell new....a LP for 4500-6000 really? They just raise their prices because they can and people will still buy them...not I and maybe now it will bite them in their big pompous asses. :)
 
Jbird said:
I know Elderly's stopped selling Gibson electrics some time ago, but they still sell Gibson acoustics, mandolins, & banjos.

Does Gibson have different rules for the different instruments? :shrug:
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Elderly was sued by Gibson and Elderly lost and had to pay Gibson and Gibson removed their line from their store over a mandolin advertisement that said something like "Sounds just like a Gibson" and the ad was right next to a Gibson mandolin ad in their catalog.
 
The bond rating drop isn't the end but it's not good news.

At this point, I do genuinely wonder what their plan is. The "better branding" strategy reeks of, "We don't have a plan so we'll keep doing what we've been doing and hope for the best."
 
Hopefully they won't fold before this afternoon/evening or tomorrow. I have some business in Boise tomorrow AM, and I am traveling over tonight. I hope to stop in tonight or tomorrow after court. Not shopping for anything in particular, but thought I would check out some guitars loaded with a P90 in the neck.
 
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