an interesting read about Guitar Center.....

B-squared

Silver Member
OK, OK. We all know we aren't supposed to go into political issues here and this is dangerously close. The article referenced is extremely slanted. (Any individual in the US who itemizes their income taxes understand write-offs).

My main drum shop is independent and I go there rather than GC because they know drums. However, GC still has deals on sticks and heads that I take advantage of occasionally. They don't have to know drums to make those sales. I think I know what I am doing. If you don't like GC, don't shop there. Please leave it at that and leave out the political stances.
 

bermuda

Drummerworld Pro Drummer - Administrator
Staff member
My experience with the GC store here is that they will just give you the lowest price on certain things.

But there's a huge catch to it - it's only on one specific item, and you never know what it will be, or how long it will last.

As a sales technique it works though - an effective form of 'intermittent re-enforcement'.
That's similar to a loss-leader, which is typically advertised in order to bring you in with the hopes that you'll also buy other stuff that's not priced so attractively. I don't think GC has the worst prices, but they're generally far from the lowest, and even Sam Ash beats them on most things.

But one great price on one item that someone may or may not need, and only for a short time, is not worth appluading.

Bermuda
 

bermuda

Drummerworld Pro Drummer - Administrator
Staff member
If you don't like GC, don't shop there. Please leave it at that and leave out the political stances.
I don't think we're getting political here, just straight talk about finances, leverage, and the reasons so many musicians don't spend money at GC. I really don't wish anything ill towards Guitar Center, but they're reaping what they've sowed. If bringing more dollars into their stores is what's going to save them, then they need to change the way they do business in order to accomplish that.

About 4 or 5 years ago, I was asked by someone in "corporate" to list the reasons that pros don't shop at GC. I made a comprehensive list that dealt with pricing, selection, items in stock, and a special emphasis on hiring competent employees. But not one of my suggestions or observations was ever addressed.

I'm not suggesting that I could have solved GC's problems over the long term, debt and income aren't always mutually exclusive. But I could have made the drum departments more attractive for more drummers, and brought in more business from players at all levels.

Bermuda
 

zarrdoss

Gold Member
I imagine they would not just go away but restructure and close some stores that are not doing so well and focus more on internet sales. We have other drum and music stores around here I can go to but I get most of my stuff on line because its just cheaper and I don't like going anywhere.
 

Trip McNealy

Gold Member
I'll admit I've 'shopped' at GC/Musicians Friend but only when I was in a pinch (like Bermuda mentioned - I need sticks THAT night on the way to a gig and my mom-n-pop is closed) or I had one of their super-duper online coupons (snagged a new Tama SLP snare for real cheap) or the lead time to get something from the mom-n-pop was just too long for the timeframe I needed it.

Otherwise I am VERY fortunate to have a mom-n-pop music store 12 minutes from my house where I can get practically anything within reason ordered for me and I've been a customer for so long, they extend a friendly little discount. I've bought my first and current drum kits from them too. The drum dept Manager is very friendly and knowledgeable. If my memory serves me correctly, they've been in business for over 25 years and never have been in danger of closing.

GC can fold, I don't care. They don't care about me to begin with.
 

mxo721

Senior Member
I see nothing political about this thread. I don't wish bad for GC or it's employees...my thing about being a consumer is HONESTY. and if I see a snare drum on the wall for $300. one week, then hear that it's now on sale for %50 off,, and i drive out there and it's still $ 300. there's something wrong with that, they wasted my time. I don't appriciate that in any business.
 

wildbill

Platinum Member
....But one great price on one item that someone may or may not need, and only for a short time, is not worth appluading...

I wasn't applauding them. I was giving some insight to a specific practice that's used by my local GC store, for those who might not know the store.

If you read the full post, you'll see that I think that concept is kind of absurd.

I said it's:

"A very haphazard way of doing things though. And if you were wanting to get your whole setup through those deals, it'd probably take several lifetimes. LOL :"
 

bobdadruma

Platinum Member
What strikes the most is that they do both internet and store retail in high volume and they still are under water.
Musician's Friend has a great selection of drum hardware.
I have bought many things from there over the years.
MF is also of course failing.

True, Guitar Center has issues with the retail store service.
There is much more here than just that.
The bottom line is that they moved a lot of product and they are failing financially.
Thats crazy!!!

This is like WalMart failing!
 

alparrott

Platinum Member
I guess that I'm lucky that the nearest GC is 170 miles away south of Seattle, but a bunch of my good friends work at the local music store that is a dealer for every single one of my preferred brands and will work on deals with me for any item I care to order in, and usually have enough heads and sticks and spare parts in stock that I never have any sort of emergency. And failing that, Donn Bennett's Drum Studio is closer than the nearest GC, too, and I love going there every time I venture westward. We also have Ted Brown's in Tacoma and Yakima, way friendlier and with a comparable selection of gear.

If GC disappeared from the face of the earth tomorrow -- I'd live =) Hopefully the impact to my favorite brands would not be too severe.
 

8Mile

Platinum Member
I don't want to see the manufacturers suffer, so it's not as simple as just wishing for bad things to happen to giants like GC.

But still, I have no love for the way the large corporations and conglomerates have killed the brick-and-mortar, mom-and-pop shops. My local shop has had to all but abandon the idea of stocking for retail so they can focus on teaching. The students who take their lessons at the shop will check out a cymbal or drum set on their way out, then their parents will go buy it online or at a GC.

The parents of these kids see no value in supporting the local business. And it's not like the prices are that much different. Are you really going to eschew the chance to help keep your local shop in business to save a couple bucks?

For me, the value of having a local drum shop is worth supporting. I get competitive prices, plus a whole host of services at no extra charge, because they're a drum shop run by drummers.

So in the long run, if GC's troubles mean mom and pops start resurfacing, then in the grand scheme of things, that would be fine by me.
 

B-squared

Silver Member
I appreciate that we aren't headed in a political direction - thank you. The GC business model is puzzling to me as a business owner, and frustrating to me as a musician. In that sense, I can relate to what is being discussed here.

I just don't think the big box model works well in the music business. I don't think a big box model would work in selling rare art, teaching yoga, training hunting dogs, or any of a multitude of different business endeavors. Even my own business of structural engineering could not be marketed as a big box business. The end result does seem to be a business that is not all that customer friendly. It is what it is, and I would not be surprised if the business fails. Many businesses have and many more will. That is the free market at work.
 

DrumEatDrum

Platinum Member
Well, I don't think GC will be going out of business any time soon.

Perhaps a massive re-structure, perhaps some store closing. Perhaps they go back to being a public company and get out of Bain's hold. When I interviewed to be an accountant, they wanted someone who was up on S.O.X. (USA laws about financial statements), and SOX only applies to companies that sell stock publicly, not privately held like GC currently is. So we'll see.

It has had far reaching implications. Fenders IPO was canceled because investors saw too much of Fenders Accounts receivables were to GC, as well as a significant percentage of sales were to GC, and with GC's downgraded debt status, the feeling on Wall Street was Fender would crash if GC were to default on it's payments to Fender.
(Fender owns KMS, who owns Gibraltar, Latin Percussion, Toca, most of Gretch, and distributes Zildjian/Sabain/Remo/all major brands of sticks to smaller shops who don't qualify for direct sales).

And of course, outside of Fender, nearly all bands have a ton of their accounts receivables with GC (because as standard practice in retail, manufactures sell to a retail store, and the store has 30 days (or more) to pay).

So, if GC were to suddenly go belly up, we could see many major drum brands either collapse, or be forced to cut back.

That said, I never quite understood why when GC bought out all the subsidiaries it now owns that it didn't just consolidate them all. They essentially compete with themselves in the online markets, even though everything is run out of the same office by the same people.
 

bermuda

Drummerworld Pro Drummer - Administrator
Staff member
What strikes the most is that they do both internet and store retail in high volume and they still are under water. .. The bottom line is that they moved a lot of product and they are failing financially.
As I'd said, debt and income aren't always mutually exclusive. Let's assume that GC is moving a lot of product, and maybe that their gross is stable. It's not that their income is necessarily declining, it's that they're too leveraged. Their debt keeps growing.

What they've got to do is create more profits, which means they need to sell more goods. I doubt that will happen all by itself if things stay the same at the store level, and if they reduce prices to increase volume, they've got to sell more just to stay even. It's a slippery slope for them right now, just as it can be for individuals who make plenty of money, but are too leveraged to get ahead, and so remain in perpetual debt. A common solution to that is bankruptcy, and GC wouldn't be the first company to entertain that (word in the industry is that they've been bordering on that for a few years.) In theory, basic BK is supposed to give the company extra time to clean up their debts, it doesn't absolve them, and companies in bigger trouble than GC have bounced back. But, we shall see.

Bermuda
 

?uesto

Silver Member
I've been to any given GC probably a hundred times, to check out used stuff and whatever they may have that's newly released or whatever, and I can assure they don't have the "lowest" prices.

My store is a Five Star Drum Shop, and all Five Star Drum Shops, as well as a select few other stores around the country, get max discount from most of the big companies, plus huge freight deals, which means we can give the lowest prices most of the time. And we don't need a manager or a holiday to do it. We give awesome deals to our friends/family, local pros, schools, churches, etc.

Something else I've noticed is the huge gap in sound/quality with what we get vs. what GC and Sam Ash get. A lot of the cymbals at those places sound terrible. Not all of them, and not all of ours are the best sounding, but pound for pound, a lot of cymbals that go to those places are definitely towards the crappier end of the sound spectrum..
 
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toddbishop

Platinum Member
As I'd said, debt and income aren't always mutually exclusive. Let's assume that GC is moving a lot of product, and maybe that their gross is stable. It's not that their income is necessarily declining, it's that they're too leveraged. Their debt keeps growing.
At the risk of being political by describing what Bain does:

In 2002, after strong Christmas sales, Bain took out dividend recapitalizations, according to court records and multiple news reports. “Bain made KB [Toys] borrow heavily and redeem $187 million in stock to stay afloat and pay dividends to Bain's owners and investors,” according to The Berkshire Eagle.

KB executives were also rewarded: $18.4 million for CEO Michael Glazer, $4.8 million for CFO Robert Feldman, $3.3 million for senior VP Thomas Alfonsi, and nearly $1 million apiece for half dozen directors, according to the 2006 lawsuit and former employees.
It's not real surprising that GC is drowning in debt-- maxing out their client companies' credit while it lasts seems to be a major way the Bain people make their money.

It can be kind of hard to do the right thing with purchasing drum gear-- local independents can be nearly as useless as the corporate places. I just try to throw as little money down their maw as possible, and if I find a good company, either locally or on line (eg Steve Weiss and Cymbals Only), I'll give them my business whether or not they they always have the lowest price.
 

Andy

Administrator
Staff member
Something else I've noticed is the huge gap in sound/quality with what we get vs. what GC and Sam Ash get. A lot of the cymbals at those places sound terrible. Not all of them, and not all of ours are the best sounding, but pound for pound, a lot of cymbal that go to those places are definitely towards the crappier end of the sound spectrum..
Now that is interesting!
 

bobdadruma

Platinum Member
Yes, Bain loots some of the companies and investors. They save some companies and the make money while destroying others.
Not to mention the jobs that are lost.
 

wildbill

Platinum Member
....Something else I've noticed is the huge gap in sound/quality with what we get vs. what GC and Sam Ash get. A lot of the cymbals at those places sound terrible...

Maybe it can be chalked up to 'expectation bias'.

Or the special seasonings you guys use.

LOL
 
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