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Guitar Center is keep on keeping?

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  • Guitar Center is keep on keeping?

    Spent some time today initially just to see if there's news on Dave Simmons and the whole trademark/court case thing. I did read through the initial thread here on vdrums.com again - dating back to 2006 - and continued re-reading the thread about Guitar Center on the ropes started by Kurth in January 2013.

    Inside that thread was a link from 'The Tone King' - a mostly guitar-oriented gear review website - which featured a little background history on Guitar Center, the involvement of 'Bain Capital', and the current financial situation of Guitar Center.

    Particularly, its heavy debt, a $2 billion figure in sales, dropping down to a mere $170 million in earnings, a downgrading by the analytics, and the '...cluster-frak sundae...' that their finances apparently are. Closing with the question, where Guitar Center was heading next.

    Well, and here we are... that's what this thread shall be about and that's what I wondered ...curious as I am!
    Fueled by this, I checked 'The Tone King' site and found the follow-up article that's most current:


    I'd like to finish with Kurth's words:

    "I shudder to think of the short-term repercussions, lots of manufacturers depend on GC."


    "My best friends' name is J-SON. They used to call him 'Mr. Parse.' He has an 'Error'..!"


  • #2
    All I know about GC, besides all the comments about the obvious lack of employee knowledge and poor care of gear on the floor, is that when they acquired Musician's Friend some time ago....MF's customer service and and packing when shipping gear went down the tubes and has suffered severely. I've been dealing with MF from it's inception so I may notice these things a bit more than others...but the fact remains the same.
    8 piece DIY Acrylic, 2x2Box DrumIt5, Gen16 4xDCP, DIY Acrylic&Gen16 Conversions, Sleishman Twin-QuadSteele hybrid, Gibraltar&DrumFrame rack, DW9502LB, Midi Knights Pro Lighting


    • #3
      I was worried that with net 120 (or worse) GC owes a lot of money to instrument manufacturers, and if they default, it will cause some damage to the music industry as a whole.

      It is likely manufacturers are bailing because they aren't getting paid, or they are anticipating it. They can read the same news we can after all.

      As far as online retailers, there are plenty there to take up the slack, we can use Sweetwater, Sam Ash, and RMC to name a few. My current fave is Sweetwater, but I have nothing against the other guys either.

      In my area we have some pretty good local shops that can pick up the slack too.

      But the GC thing upsets me a bit, allow me to rant a little, and offer my take on the Bain/Ares thing:

      It seems immoral to me that a leveraged buyout (meaning borrowing 80% of the money to buy a company) means that the company bought assumes to debt used to buy it. Bain essentially bought GC and GC assumed the $1.5 billion debt. That kills me whenever I think about it.

      It isn't like Bain absconds with the money though. They can only make money if they can sell the company for more than what they paid for it, and GC was strong enough to pay down the debt a bit, neither of which happened. They were counting on GC continuing to grow, and it looks like it didn't. So what was a healthy company with low-debt that could have easily weathered a low-growth period was transformed into a company on the brink of default that required high-growth just to survive. And now a low-growth period has arrived, and things are getting ugly.

      Bain did exactly the same thing as someone who bought a huge amount of stock on margin, expecting it to go up, and now they are facing a margin call from Ares. Bain leveraged themselves to the hilt, would have made out huge if their growth expectations had ben met, but also stood to lose a huge amount on the downside, and now is miraculously talking Ares into taking most of the hit. Bain's leverage is likely chapter 11 and chapter 7 bankruptcy protection laws. Ares is apparently figuring that they will lose less if they take GC over and liquidate it themselves than they will get in the event of a chapter 11 (or chapter 7) default by GC. IMHO Bain gets the better end of that deal, Ares assumes all the risk once they take over GC, they have no guarantees about how they will fare during a liquidation, only estimates for the values of the various assets, which are provided by the current owners.

      The primary beneficiaries of the original Bain/GC deal were the previous owners of GC who sold it (and made out like bandits on the sale), and left it to die in the hands of the new owners. Imagine someone else borrowing money to buy your house at 20% more than it is worth, hard to pass that one up, since they assume all the risk. But pretty much everyone else down the chain lost. Sounds like Bain may get out with only a little loss, Ares probably won't fare as well, employees get the pink-slip shaft, and instrument manufacturers may not get paid all of what they are owed.

      Us customers aren't directly affected, but the impact to the music industry will be felt by everyone.

      Looks like the ball is about to be in Ares' court.
      Mini-kit: TD-9 + Alesis Control Pad + Alesis Sample Pad + PDX-6 snare
      Micro-kit: Handsonic HPD-20 + an old pair of hands.
      Speakers: QSC-K10 "thumper", DBR-10 "little thumper"


      • #4
        I order things from time to time from MF. I don't think I've ever ordered from GC (the closest GC is an hour away). I used to order a lot from American Musical Supply and they were great but in the last year or two their shipping times degraded considerable. It used to be that I could order by 4PM and see it the next day-free. Now it's several days to a week.

        Fortunately, there is a local shop where I can get stuff cheaper than MF/GC, including the local tax. They don't carry every brand though and sometimes I have to wait a little longer but even if the price was the same I'd prefer to work with a local shop.


        • #5
          I did quite a bit of business with guitar center in the past and it has been my experience that if you know the product yourself and you just want to buy it, they are not bad. As far as trying to get answers about a product or availability, for me, was a different story. I realize now that when I was waiting for my 2 box from them and was becoming more and more frustrated, that I directing it at the wrong party. They really couldn't give me an answer because they didn't know. I have a contact there now and I would definitely do business with them again


          • #6
            I can't stand GC. No one gives a crap, the employees are paid poorly so they barely care about their jobs, the store is a mess, the selection is often poor... ugh. I hate going in there.

            I used to shop at MF but I've noticed they stopped giving out coupons. Did that coincide with the GC merger?


            • #7
              I have bought lots from mf , cascio interstate, sweetwater, music 123, American music supply, sam ash and I had decent experiences with all of them. . It is up to me to shop and negotiate and get free shipping, whatever it takes. I have to agree that most of the gc employees I spoke to told me that they were getting paid , peanuts. Anyway, some of them were very helpful, polite and accommodating. Again, the more researching products prior to purchasing, the easier the process is. The advantage of brick and mortar stores is the return process. No shipping back and waiting for new orders. So plusses and minuses with both , I guess


              • #8
                I have mixed feelings about GuitarCenter. Like others here I have bought from almost all the local and online retailers and I always shop around and compare prices.

                I prefer to reward local small business when I can, even if it means paying slightly more than my best online deal. Most local retailers in my area will reasonably match prices if I politely ask them to.

                I mostly use GuitarCenter.com to check for deals on USED equipment. Their shipping charges are reasonable (usually $4.50) and if the product is more beat-up than I wanted I can return the item to my local GuitarCenter stores. Most of the items I bought were cheaper than eBay prices so I was willing to take the risk of buying used items sight-unseen.

                ...on a few rare occasions the used items were much different in condition than described, they have been willing to refund the shipping as well.

                As for my local GuitarCenter stores, I wouldn't miss them. I have had mixed experiences at best. I never get annoyed enough to talk to a manager, I simply walk out the door and drive a mile or two to Sam Ash and see if they have better help on that day.

                Last edited by module; 03-25-14, 06:35 PM.
                My wife has no idea how much I really spend on my toys.


                • #9
                  I enjoy the occasional trip to Guitar Center, but I never buy anything there.

                  The sad truth, at least in my area, is that they cater to the novice far too much, and have brands that they obviously push really hard, without having brands and products I'm interested in. Case in point is Axis pedals; I was interested very much in trying the Derek Roddy pedals; they look like top-quality pedals, have the electronic trigger built-in, but are bumping up towards the thousand dollar range for the double pedal. Guitar Center have none of these types of pedals in stock, and often they have no axis pedals at all. If I ask the sales person, I'm told "We can get them for you.", which would basically equal me paying a 20% overhead for the luxury of having GC be my delivery person. I'm still spending the money to purchase something I haven't tried. My guitarist friend claims the same situation with guitars and amps.

                  I would miss Guitar Center, because I like being in there, I like looking at instruments (even instruments I don't play!), I like being around musicians, and I like to just be around that excitement of a kid in the drum department looking at all the gear and playing with it.

                  Unfortunately, when you're talking about gear like we all use -- my 30kv's for example -- GC charges so much that it would be insane to buy the kit there. The guy at Guitar Center quoted me a price for my kit that was a thousand dollars more than what I ended up paying. It's too much to justify.



                  • #10
                    Yeah , I ought my first e kit there which was a td 9 and I overpaid at least 300. I had it two weeks and didn't like the pads so I upgraded to the bigger pd 125's and 105's and they came to my house with the new kit and took the old one away which was nice and they gave me all my money back for the old one and applied it to the upgrade so it only cost me another 400 or so. I agree, I like being able to look at all the instruments there, too. I honestly look there and buy elsewhere. Now that rmc audio direct is a 2 box dealer , I don't think I will need to go anywhere else


                    • #11
                      I'm still trying to 'plow' myself through that article...

                      Not only is the language kinda in the way - the whole 'financial lingo' - but also my lack of 'business finance' understanding in general. I should've paid more attention in school to such things, I guess...
                      Last edited by hairmetal-81; 03-29-14, 11:02 AM.

                      "My best friends' name is J-SON. They used to call him 'Mr. Parse.' He has an 'Error'..!"



                      • #12
                        Oh where to begin. Well first I guess GC's problem is customer service or lack there of. I can't tell you the numerous times I have tried or actually bought something from GC. The last trip was exactly that . . . my last trip. When I bought my set of DW's from a guy on craigslist, I needed hardware and cymbals. I priced it all out on MF which ships free with no tax. GC had a promo running that stated, we'll match any online deal including tax. Great I can get it today. So, I piled on a list of cymbals, hi hat stand, cymbal/tom stands, tom adapters, throne, pedal and more stix. The sales rep was clueless. Obviously thrown out there to learn, he rings me up at almost twice the price as online(mainly the tax). I showed him the online price. Manager gets involved. Says he'll do the deal, but really doesn't. So, with a huge pile of gear in the middle of the drum room, I thanked them for their time, turned around and left the building. I'm about to open my car and the manager is behind me. He asks what it will take to make the sale and I said: "I want the price you were supposed to give me less $100!" He did it. But the taste in my mouth left my future purchasing to online transactions.

                        That's their first problem which is no educated sales reps. The second problem is factory prices which turns in to overly inflated prices. While this hits all retailers, if I remember correctly, Gibson decided to be snotty and only sell to companies that could do $X in sales. So alot of the smaller companies without Gibson support stuck with Fender and others. Don't get me wrong, we have a class A Gibson manufacturing facility downtown. But their prices are over inflated and when GC jacks it up, it makes it difficult for the average person to buy. When either MF or GC announce a big sale, it's generally not. If you are a frequent lurker of these sites, you pretty much know prices. So when they email you a big sale and you check it out only to see it's nothing but an attempt to get you to look, it's bad business.

                        With all the online retailers offering some discounts or match any price with free shipping and no tax, as well as sites like Craigslist and ebay selling used gear at killer prices, it's a wonder retail stores like GC have stayed afloat. Their marketing alone is a budget killer. If you're going to spend money on marketing, make sure you have a real purpose to not only get people in the shop, but to buy. I think that's the third reason GC is going down, they can't make the sale. Of course that's all due to problem's one and two.

                        With the recent recession, alot of people just don't have the discretionary funds to run out and pay retail for music equipment. Companies have to adjust or they die. Guitar Center and many others will vanquish if they don't tighten their belts, adjust their prices, and educate their sales crew.

                        Ok, I've ranted long enough. I just wanted to add my two cents worth and save a few hundred quid on a trip to the psychologist.

                        Roland TDW-20 Frankenstein kit: TDW-20 Module, TD-12 Rack. 1 PD-125 Snare, 4 PD-105 Toms, 1 KD-120 Kick, 1 CY-12 Cymbals, 3 CY-8 Cymbals, 1 VH-12 Hi-Hat, DW-9000 Remote Hi-Hat Controller, DW-5002AD3 Double Bass Pedal, Roc N Soc Nitro Rider Throne, Homemade Drumstick Holder.


                        • #13
                          Pretty interesting article on how Bain bled GC dry:

                          Immensely powerful yet with a liquid cat-quick elegance