an interesting read about Guitar Center.....

GruntersDad

Administrator - Mayor
Staff member
This bit is about HCA, the company I work for. For now. things seem to be OK. We made money Bain and the others made money. But we are the minority.



Among the private equity deals of this century, HCA stands among the very best. Bain Capital partnered with KKR and Merrill Lynch to buy the hospital chain for $33 billion in November 2006. Bain invested $1.2 billion for a 25% stake and recovered almost all its money with a trio of special dividends in 2010. The Boston firm pulled out another $457 million when HCA went public again in March 2011 and still owns shares worth almost $3 billion. Despite the financial crisis and periodic whiffs of scandal swirling around the for-profit hospital chain, HCA is worth 26% more today than it was seven years ago, and Bain investors have more than tripled their money.
 

denisri

Silver Member
Very interesting! several years ago I made a switch to doing business with a local drum shop in Rhode Island. I don't miss the general lack of service. Maybe these big drum distributors will consider doing more business with local shops! Buy local and support local business. Denis
 

bobdadruma

Platinum Member
Bain saves the companies that it deems that it should save and it loots the ones that in Bain's eyes aren't worth saving.
Either way they win.

Watch the Danny Devito movie, "Other Peoples Money" for a entertaining view into this investment scheme.
 

bermuda

Drummerworld Pro Drummer - Administrator
Staff member
I just want to talk about drums, and not politics while I'm on this forum.
I've seen nothing related to politics in this thread, other than the suggestion that it's bordering on the political. I really don't see it.

This is a healthy, interesting and spiritied discussion about a business that sells a large percentage of drums, percussion and other musical instruments in the US, and what happens to them, the MI companies, independent music stores, and us as drummers, if said company should fail. I'm fascinated by the perspectives and insights being discussed here (actually this topic made the rounds a while back at Drumsmith, with most of the same observations being made there as well.)

Bermuda
 
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Anthony Amodeo

Guest
don't you think the demise of these monsters would leave a nice void for a lot small companies to thrive in and fill ?

I personally would love to see a bunch of mom & pop stores music stores and drum shops start showing up in small neighborhoods and big cities again

and as for the manufacturers ......the strong would survive......just as they did before they put all their eggs in the monsters basket

I think a demise of the monsters would weed out all the garbage and let the cream rise ....and I am all for it

let's bring back the days of the drum shop where I know the owners name and he knows mine
 

opentune

Platinum Member
let's bring back the days of the drum shop where I know the owners name and he knows mine
might happen, in large urban centres. that would be nice indeed.
but look at shopping trends in general. the majority of business in everything is moving online. even on this site, i am amazed at the number of people who buy entire kits online from ebay etc, without trying them out or anything.

i would be glad to see any megastore go.
 

bermuda

Drummerworld Pro Drummer - Administrator
Staff member
don't you think the demise of these monsters would leave a nice void for a lot small companies to thrive in and fill ?

I personally would love to see a bunch of mom & pop stores music stores and drum shops start showing up in small neighborhoods and big cities again

and as for the manufacturers ......the strong would survive......just as they did before they put all their eggs in the monsters basket
I like the idea as well, I really do miss the plethora of music stores and drum shops that I shopped at not so long ago. But if GC went out, how long would it be before small shops start appearing again? What do the manufacturers and distributors - and the drummers - do during the transition? Things are still pretty tough out there all around. Does an individual just go to the bank, say "Guitar Center closed last week, my shop is just what the local musicians need!" and walk out with enough money to start-up a location and buy inventory?

I'd thought about opening a drum shop maybe 6 or 7 years ago, and I'm sure glad I didn't! In investigating some of the costs, even just renting the space, it's a very expensive proposition, and a major investment. Companies don't sonsign gear like they used to, and usually require a hefty purchasing commitment to get terms with them. The timing is just really bad right now, regardless of the outcome with GC.

Bermuda
 

DrumEatDrum

Platinum Member
don't you think the demise of these monsters would leave a nice void for a lot small companies to thrive in and fill ?

I personally would love to see a bunch of mom & pop stores music stores and drum shops start showing up in small neighborhoods and big cities again

and as for the manufacturers ......the strong would survive......just as they did before they put all their eggs in the monsters basket

I think a demise of the monsters would weed out all the garbage and let the cream rise ....and I am all for it

let's bring back the days of the drum shop where I know the owners name and he knows mine
It would be nice, but I don't think it will ever happen on any scale.

The internet makes it impossible. Too many people selling drums on the internet for for only a small percentage above wholesale. Local shops with rent, utilities, and staff to pay can't compete.

It's why I left working retail drum a long time ago. It was fun, but when you spend 4 to 8 hours with a guy going over every detail of the drum set he wants, explaining the in and outs of every make that fits his needs, and help him pick the perfect set, then he comes in with an online price that's 5% above cost, you realize you just made 17 cents an hour on this deal. That doesn't pay anyone's rent or put food on the table.

The reason so few places have anyone qualified to working behind the counter is anyone who actually is qualified knows he could make more money doing something else.

GC going under wouldn't change that aspect.
 
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Anthony Amodeo

Guest
I like the idea as well, I really do miss the plethora of music stores and drum shops that I shopped at not so long ago. But if GC went out, how long would it be before small shops start appearing again? What do the manufacturers and distributors - and the drummers - do during the transition? Things are still pretty tough out there all around. Does an individual just go to the bank, say "Guitar Center closed last week, my shop is just what the local musicians need!" and walk out with enough money to start-up a location and buy inventory?

I'd thought about opening a drum shop maybe 6 or 7 years ago, and I'm sure glad I didn't! In investigating some of the costs, even just renting the space, it's a very expensive proposition, and a major investment. Companies don't sonsign gear like they used to, and usually require a hefty purchasing commitment to get terms with them. The timing is just really bad right now, regardless of the outcome with GC.

Bermuda
all solid truth

my wishful thinking over shadows reality in this situation

it pisses me off that these stores have killed most of the real shops
it pisses me off that they have cornered most of us.....almost to the point where we have to shop there
it pisses me off that they mostly employ people who have no clue about the products that they sell


to me these stores are not for musicians....they are for the average consumer who wants a Mexican Fender Strat, or a Pearl Forum shell pack and some ZBTs
 

DrumEatDrum

Platinum Member
all solid truth

my wishful thinking over shadows reality in this situation

it pisses me off that these stores have killed most of the real shops
it pisses me off that they have cornered most of us.....almost to the point where we have to shop there
it pisses me off that they mostly employ people who have no clue about the products that they sell


to me these stores are not for musicians....they are for the average consumer who wants a Mexican Fender Strat, or a Pearl Forum shell pack and some ZBTs
Honestly, it's not GC.

Competing against GC isn't that difficult. GC has been around since the 70's, and drum shops had no problems getting thru the 80's and early 90's, even with GC's ever expansion.

Competing against the internet is what did most drum shops in.

Although the ironic aspect of this is numerous big internet sellers got themselves into severe financial problems and GC ended up buying them out.

But the smaller internet retailers, where it's just a guy, a computer, who has near zero inventory because he drop ships all the drum sets he sells, and thus has few expenses is what really killed the brick and mortar drum shop.

In addition there are far more brands now then ever, it's hard for a brick and mortar store to keep a solid inventory representing a good cross section of gear. An online place doesn't have to worry about that.

And there are now all the smaller brands of cymbals and drums who will sell direct to the consumer with the aspect of "if you buy a full set, we'll call you an endorser". Kids posting on youtube eat this up. They think they are getting validated with an endorsement, when all it is is a sale. But that's a sale that doesn't go through a drum shop.

So if you own a drum shop, GC is only one worry. You also have to deal small internet retailers who will sell at pennies above your cost, and you have to deal with losing sales to small manufactures who will sell direct to the consumer.
 
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Anthony Amodeo

Guest
Honestly, it's not GC.

Competing against GC isn't that difficult. GC has been around since the 70's,
they actually started in the late '50s and have been through a few name changes

but when they started to blow up and pop up everywhere in the early 90s before the internet boom is when small shops began to struggle

of course the internet , musicians friend and the like is not helping

thank goodness some of the true drum shops are standing strong and unaffected very much by any of this ....and are actually helped by internet sales

Pro Drum
Maxwells
Memphis
Dales
 

DrumEatDrum

Platinum Member
they actually started in the late '50s and have been through a few name changes

but when they started to blow up and pop up everywhere in the early 90s before the internet boom is when small shops began to struggle

of course the internet , musicians friend and the like is not helping

thank goodness some of the true drum shops are standing strong and unaffected very much by any of this ....and are actually helped by internet sales

Pro Drum
Maxwells
Memphis
Dales
I've work drum retail in different stints from 1987 through 2000.

Competing with GC in the late 80's was entirely possible. Even when I was working for GC drum counter in the early 90s, it was a struggle competing with the mom and pop shops, because they had the power to be more flexible with their inventory, and could carry things I wasn't allowed to stock.

It was when the internet came along that everything took a dive.

When I worked at West LA Music in the late 90's, competing with GC wasn't that big of a deal. Competing with online places is what drove me away.
 

bobdadruma

Platinum Member
Dedicated percussion shops are rare where I live.
There is only one in Connecticut.
It is a real nice store that is recently under new ownership in a new location.
I sincerely hope that it continues to do well.

~They don't sell on the net either. I am very surprised at that.~
http://www.dynamicpercussion.com/index.html
 
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Anthony Amodeo

Guest
I've work drum retail in different stints from 1987 through 2000.

Competing with GC in the late 80's was entirely possible. Even when I was working for GC drum counter in the early 90s, it was a struggle competing with the mom and pop shops, because they had the power to be more flexible with their inventory, and could carry things I wasn't allowed to stock.

It was when the internet came along that everything took a dive.

When I worked at West LA Music in the late 90's, competing with GC wasn't that big of a deal. Competing with online places is what drove me away.

every store offers internet shopping today

it's the pricing, advertising and locations that the bigger stores have over small shops
 

BacteriumFendYoke

Platinum Member
The Internet is a big problem for brick and mortar stores and I don't see it as necessarily a bad thing if there is incentive to go into a 'proper' store.

The issue for those stores is that have to have an inherent USP. For instance, Maxwell's and the various 'Five Star' stores that you have in the US are known for their selection and customer service (including product knowledge) and people of all playing demographics (across genres and abilities) will shop there because even though the price may be a little higher, they expect assistance and well-informed opinions, as well as a wealth of experience that means the customer is being served well and fairly.

It seems to me that many customers are concerned purely with the bottom line. That's fine and I can understand that but on the other hand, I can guarantee there are people out there that have bought what they feel to be the 'wrong' instrument or a poor decision based on ignorance or a lack of information that could have been alleviated by a good service representative at a store.

Case in point, I play the guitar and the bass. I will now shop in only one store in my local(ish) area because every time I go in there, the staff are engaging, friendly, humorous and have great product knowledge - especially with guitars. Their prices are reasonably competitive but I don't mind paying a Pound more for a pack of strings because the experience I get in the store is excellent. They are more than happy to let you play the guitars and give you an honest assessment if there's a possibility you might purchase. I went in the other day and looked at a Godin guitar. The assistant set up a small amp in a quiet area of the shop, left me along to fiddle and I gave him my honest assessment. 'Not for me, plus the placement of the screws in the scratchplate would hurt my forearm'.

That led to a great conversation about the guitars they stock. They are the only Vigier dealer in the area so we chatted about the carbon reinforced necks and how they affect the guitars.

That is something you just don't get on the Internet and it's the reason that all of the musicians that I know around here go to that shop - even if it's not the cheapest shop in the area.

The minute that the value of a store is recognised by the customers and the shop owners recognise the value of what they can provide, businesses succeed. The issue I can see from Guitar Center is that they don't value the customer experience as a corporation enough to continue brick-and-mortar operations. If they put the value in the customer experience then they could afford to sell at the price they do. Putting customers off with poor service, badly trained staff and a lack of inventory is not the way to make the business succeed because this is where they can potentially compete.
 

GruntersDad

Administrator - Mayor
Staff member
every store offers internet shopping today

it's the pricing, advertising and locations that the bigger stores have over small shops
My local ma and pa does Twitter and Facebook and has a website but does not have any ordering capabilities. Thy don't stock enough of any one item to ship. They do a big business in school rentals and lessons.
 

DrumEatDrum

Platinum Member
every store offers internet shopping today

it's the pricing, advertising and locations that the bigger stores have over small shops
Except there aren't as many stores as their used to be.

So when you say every store, you mean every store that is left.

Just saying, I've worked for two places that are now out of business. GC was a contributing factor without a doubt, but not the not only factor, and I wouldn't even say GC was the biggest of the factors.

GC does get much better pricing and exclusives on certain things, but I still help with purchasing for another store every year, and many manufactures will attempt to level the playing field by offering special deal or exclusives that are not offered to GC.

The new twist of manufactures selling directs faux-endosrement deals is certainly throwing another loop at the mom-and-pop shops, and of course, that affects GC's sales as well.
 
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