Guitar Center article

[Jeff Mando]

You may well be right Jeff, it’s not a project I think I will be undertaking. Not in the budget or desire. To paraphrase Woodrow F. Call:
“I can’t tolerate rude behavior in a man, I just won’t stand for it.” I’m not one to quirt someone near to death over it but, I have been known to turn on my heel and walk out.

I guess I've been a horse trader so long, that I accept rudeness, mis-information, and quirkiness as part of the job description. I deal with a lot of "self-made men" who exhibit these traits and are pretty tough negotiators, so wannabe rock-star employees at GC don't even faze me. If there's a couple hundred bucks to be made, go ahead and be rude -- I'm here to get paid. If there's a a thousand at stake, you can even cuss and slander me. I don't care. As one of my dear departed relatives used to say, "I just let that stuff roll off of me like water on a duck's back!" (but, of course, she never said back.......)

[JH Murray]

I was reading this article from the CBC that describes the demise of ToysRUs. Like Guitar Center, they have a massive debt which is grinding them into the ground. In Toys R Us that debt became the main focus of management, instead of innovative product lines and upkeep on retail stores and quality management of the sales force. That financial model was betting on a growing retail market, but it is cooking the goose that laid the golden egg for many retail giants. So perhaps it is a story much bigger than just Guitar Center.

[Mandoplumb]

It's so easynto blame the Internet when a store is going bankrupt but a lot of times excessive debt is what is keeping them from being able to change as needed to compete with Internet stores. We in America love debt we finance our homes, cars, campers,etc then furnish them with our credit cards. Heck if the government can why can't we.

[allenhopkins]

... Heck if the government can why can't we.

'Cause the government can print money, and we can't. Legally, anyway.

The way things are going, in a few decades we'll have large on-line retailers, and little individual shops, and nothing in between. No surprise that it's the "chain" retailers like Radio Shack, Toys'R'Us, and Guitar Center that are feeling the pinch. They have to borrow to expand, and find they've expanded beyond their means. You know one of those chains is in trouble when its advertising disappears from TV -- which, of course, contributes to declining sales.

I still see Guitar Center ads, and get "sale" mailings, so

[Folkmusician.com]

With Toys R Us, the debt definitely sped up the process, but they were losing market share. It was just a matter of time.

Brink and Morter Toy sales are in decline(online is growing), and Walmart is taking a big chunk of that with just 5 or so isle of toys. Toys r us had to support an average store size of 35000 sq ft.



Meanwhile, online:


Amazon is unbelievably good at what they do. It's not that they're evil, just good. Toy's R us stood no chance against them online.

[Mandoplumb]

My point is if they had been operating within their means, not mortaged to the hilt they may have had the money to restructure away from those 3500 sq ft stores to something else, I don't know what a combo store Internet or something. I heard they tried Internet but it was too slow, hard to use, problems. What profit they were making went to intrest on loan, no money to explore options. Allenhopkins I know we can't operate in the red like the gov. That was tongue in cheek but the statement is meant to say how long can we, companies, and yes even the gov continue to exist in so much debt.

[Jeff Mando]

I ran across the company's history on their website, it is worth reading, IMHO. Basically, GC started as the Organ Center in 1959 and then became the Vox Center in 1964 anticipating the influence of the Beatles and the "British Invasion" and the switch from organs to guitars in the music retailing business, before becoming the Guitar Center in 1971. In 1980, they bought Kramer at the height of Eddie Van Halen's popularity as an endorser. In 1999, they bought Musician's Friend to build the brand's online presence. My point is that more than once, GC has been at the right place at the right time as far as music retailing markets are concerned. My guess is that they will figure it out, again, one way or the other.

[MikeZito]

I just read the M.C. Homepage article about how long-time dealers are bailing on the highly-troubled Gibson, because Gibson is so hard to deal with . . . but every time I walk into G.C. is see TONS of Gibson's hanging in the wall.

Birds of a feather?

Just saying . . . .