end of guitar centre?

GruntersDad

Administrator - Mayor
Staff member
In my neck of the woods, Sam Ash is another big box and only about a mile away from GC. I'm sure they will be celebrating if this is true or turns out to come to fruition.
 

Hollywood Jim

Platinum Member
In Phoenix, Arizona we have 4 Guitar Centers within a 30 mile radius. And they are all right next to a freeway.

I'm not complaining because the more stores, the better it is for me. But I think they are competing against each other.

.
 

Brian

Gold Member
I think "end of guitar center" is a bit histrionic, but online retail has definitely changed the game since the 90's and that can't be ignored. Staples is another example, and another Bain Capital investment.
 

wildbill

Platinum Member
I don't know all the details, but Bain bought GC in 2007.
http://www.reuters.com/article/2007/06/27/us-guitarcenter-takeover-bain-idUSBNG22972720070627
Supposedly, they dumped pre-existing debt onto GC, and the rumors have been going on since then.

Adding fuel to the fire, Ares jumped in, while Bain retained partial ownership in April of 2014:
http://www.wsj.com/articles/SB10001424052702304441304579479170159872750
Rumors have been heavier since then.

It's my (limited) understanding that GC is actually doing OK, but is struggling from debt that the stores themself didn't produce.
Take that with a grain of salt though - LOL

I was surprised and disappointed when the local Mars Music store folded.
 

drum4fun27302

Gold Member
From what I have read here and there , it looks like it is going down a slope. Not sure about the % of the incline though.
 

KamaK

Platinum Member
I knew Eric in high-school. Bright guy.

While I agree with much of the article, it reads as being a bit sensationalist. I think his overall conclusion is correct though.

Big Box is dying. The ShowRoom is born.
 

BacteriumFendYoke

Platinum Member
Given Guitar Center's massive debt to Fender at the moment and Fender making noises about opening their own retail outlets, I smell a takeover. Fender may as well take over Guitar Center and recoup some of the payments.
 

johnwesley

Silver Member
Best place for drum anything in Arizona, is Arizona Drum Shop. Ron the owner just now expanding to triple the current size and he's doing very well. Knows everything about drums or will have an answer for you while you're in the store. Not like GC where the guy in drums may be a guitarist that has no clue about drums.
 

rogue_drummer

Gold Member
I have mixed feelings about this one if it is true. I've heard many say GC has been dying a slow death for years though.

Yes, I get annoyed sometimes at the guy working the counter in the drum room. He may know a lot about drums or he may not. It all depends on who is there at the time. He may be some guitar player assigned to the room to just ring up sales and know absolutely nothing about drums.

Their 2 week hold policy on items they just bought and put on the floor is nonsense. And around here they HAVE forced out the mom and pop shops in the area and a lot of pawn shops can't beat their prices.

But where I live in Fort Worth, Texas, they are about 5 minutes away and they do have the best selections of drum and equipment around. I want to check the cymbals out for myself and maybe play a drum if I am interested in buying. They have recently they have increased the number and kinds of sticks and drumheads they have available to sell so it's convenient.
 

DrumEatDrum

Platinum Member
It's my (limited) understanding that GC is actually doing OK, but is struggling from debt that the stores themself didn't produce.
Take that with a grain of salt though - LOL
^ This is true.

GC was a publicly traded company. Bain bought up all the stock and took it private, but used debt to pay for that stock purchase. And now GC as a corporation is dying a slow death from the weight of all the debt the stores themselves never produced.

I have a hard time seeing GC actually going under, because the problems are more in the way the company is structured than it's ability to function.

And there is always the chance GC goes public again, which would pay off much of the debt. It is interesting than when I interviewed for an accounting position there some time back, they wanted someone who was familiar with the Sabrbanes-Oxley act (which I was). A company only needs people who know the Sarbanes-Oxley act if they are publicly traded, because the Sabranes-Oxely act does not apply to privately held corporations.

But then again, look what happened to Circuit City and KB Toys.
 

Skyking

Senior Member
DrumEatDrum;1326732 I have a hard time seeing GC actually going under said:
Yes, the OP's article correctly concentrates on GC's inability to pay it's debt. However IMO, even if it were financially possible to pay the debt, poor business management will probably kill any chance of survival. Case in point, the Northside Indianapolis GC which I, as a consumer, find it to be old, beat up and dirty. Kids with no money beat the snot out of the "new "retail equipment and the noise is insufferable. Everything on the floor looks well used. I've tried to shop there but usually end up leaving the store after conversing with inexperienced sales kids and no one cares or even asks why. Maybe this is just one badly run store. Unfortunately I think there are more just like this and that will ultimately kill GC.

So, again, IMO, GC's problems aren't purely financial. While they say there is nothing that money can't fix, there are exceptions. When the Titanic was going down all the money in the world could not save it from sinking, because at that point, it's problems weren't financial.
 

DrumEatDrum

Platinum Member
Yes, the OP's article correctly concentrates on GC's inability to pay it's debt. However IMO, even if it were financially possible to pay the debt, poor business management will probably kill any chance of survival. Case in point, the Northside Indianapolis GC which I, as a consumer, find it to be old, beat up and dirty. Kids with no money beat the snot out of the "new "retail equipment and the noise is insufferable. Everything on the floor looks well used. I've tried to shop there but usually end up leaving the store after conversing with inexperienced sales kids and no one cares or even asks why. Maybe this is just one badly run store. Unfortunately I think there are more just like this and that will ultimately kill GC.

So, again, IMO, GC's problems aren't purely financial. While they say there is nothing that money can't fix, there are exceptions. When the Titanic was going down all the money in the world could not save it from sinking, because at that point, it's problems weren't financial.
Yeah, but that's how GC has always been, even way back in the 80's when it was just a few locations in California.

Much like Walmart, it has not only thrived, but grown at incredible proportions despite the fact nearly everyone says they don't like shopping there. lol.
 

davidbehrens3.14

Senior Member
Please. The article was a post-industrialist, anti-capitalist crock centered around the author's economically uninformed notion that corporate restructuring destroyed profit margins for franchised stores. The author didn't mention Factors of Production trends, recent vendor dealings, or most importantly, the real cause of GC's recent deficits, which is the obvious alternatives online. Though GC has online shopping, there is usually an opportunity cost of eBay or some such retailer. Physical sales are generally going to remain the focus of GC, and will remain strong in comparison to competitors, who are weaker in terms of this "sunset industry." GC may go permanently under someday, but are supported in multiple ways and face no imminent extinction.

P.S. Just wanted to get my foot in the door and mention that here in 'MURICA we say Guitar Center, and you silly Europeans will one day see the error in your silly little 'r before e' spellings. USA USA USA
 

Aeolian

Platinum Member
True that Bain has been the bane of the chain. I know the guy who used to manage the guitar department for most of the West Coast. He now works for a small independent doing mostly on-line buying and selling but some in-store stuff. Much happier being away from the Bain schmucks.
 
M

Matt Bo Eder

Guest
Much like Walmart, it has not only thrived, but grown at incredible proportions despite the fact nearly everyone says they don't like shopping there. lol.
It's like the Spam of the business world. Everybody says they don't eat it, yet it exists ;)
 

newoldie

Silver Member
Please. The article was a post-industrialist, anti-capitalist crock centered around the author's economically uninformed notion that corporate restructuring destroyed profit margins for franchised stores. The author didn't mention Factors of Production trends, recent vendor dealings, or most importantly, the real cause of GC's recent deficits, which is the obvious alternatives online. Though GC has online shopping, there is usually an opportunity cost of eBay or some such retailer. Physical sales are generally going to remain the focus of GC, and will remain strong in comparison to competitors, who are weaker in terms of this "sunset industry." GC may go permanently under someday, but are supported in multiple ways and face no imminent extinction.

P.S. Just wanted to get my foot in the door and mention that here in 'MURICA we say Guitar Center, and you silly Europeans will one day see the error in your silly little 'r before e' spellings. USA USA USA
+1. The Sky Is Not Falling.
 
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