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#2894486 - 12/07/17 08:49 AM The longest Deathwatch
p90jr Offline
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Registered: 11/21/07
Posts: 2895
Every year someone is pointing out that Guitar Center will soon go under, with sound reasoning... and it doesn't happen. I've asked friends of mine who work in finance about it, and they looked into all of the news and say "how they're staying afloat is a miracle... a lot of people are just delaying taking a loss on the investment in the company. When they can't or won't anymore, that will be it."

I don't expect it to go down this year... I think the next financial crisis will do it in (yes, I do believe there will be another financial crisis. Nobody learned any lessons from the last one).

Guitar Center downgraded by Standard & Poors, who expect an upcoming default

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#2894598 - 12/07/17 03:10 PM Re: The longest Deathwatch [Re: p90jr]
whitefang Offline
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Registered: 05/13/02
Posts: 10005
Loc: Lincoln Park, MI, UNITED STATE...
Nor from the three or four before it.

They SEEM to be doing a lot of business, but I suspect most the dudes filling their stores are just in there to "browse" and take advantage of playing some nice guitars. and have no intention, or enough money to BUY anything. wink
Whitefang
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#2894656 - 12/07/17 10:54 PM Re: The longest Deathwatch [Re: whitefang]
Larryz Offline
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Registered: 06/23/08
Posts: 10331
Loc: Northern California
I hope they stay in business as there are fewer and fewer guitar stores out there these days. Hopefully their used guitar and equipment business will help them keep going. A lot of brick and mortar stores are having problems staying in business... cool
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#2894670 - 12/08/17 03:26 AM Re: The longest Deathwatch [Re: Larryz]
whitefang Offline
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Registered: 05/13/02
Posts: 10005
Loc: Lincoln Park, MI, UNITED STATE...
Seems unrelated (but isn't actually), but the businesses that seem to be "booming" in this day and age of iNet buying, are UPS and FEDEX. In both delivering items sold online and returning them when some are found to be defective. I don't get it. It's LESS trouble for me to go to the store, try something on, try it out, see if it's something I really want, than unpacking, repacking and driving to the UPS store or wherever you take items to deliver by FedEx. And all because I bought something online, and just because I CAN. I go through enough anxiety whenever I (rarely) buy anything from a CATALOG. But THAT'S only if I can't find the item in any local store.

Anyway, GC might find a way to survive ala the REVERB method. Strictly online sales. It's their EMPLOYEES that'll likely do most of the suffering. Oh, and OTHER businesses that are picking up are those that offer various security camera systems because there's been a sharp increase of UPS, AMAZON and FedEx packages being stolen off of porches whenever they deliver items when nobody's home. I don't know WHEN they stopped going to the next door neighbor and asking if THEY would take the package and hold it until the person who it's for gets home. I've babysat many a box for my neighbors over the years. No bother at all. wink
Whitefang
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I started out with NOTHING...and I still have most of it left!

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#2894690 - 12/08/17 07:36 AM Re: The longest Deathwatch [Re: whitefang]
Larryz Offline
10k Club

Registered: 06/23/08
Posts: 10331
Loc: Northern California
Well they just caught a guy up here in my neck of the woods stealing packages off of porches...the Sheriff Dept. put a tracking device in a dummy package and followed him home right to his front porch LOL!

Tons of people are shopping on-line these days and I admit to being one of them. +1 on USPS, Fedx and UPS doing more deliveries than they can handle and employing private delivery people. The privates sometimes get reported to the Sheriff as they drive around in unmarked cars shining lights on houses (looking for addresses)....anyway it's always fun this time of year.

Many people go to the big box and try on the products and then order them on-line. Guitar Center is aware of this and they catch both kinds of fishes in their net. That may be why they are still in business. +1 they will probably go strictly on-line like MF and SW when all else fails and close a few stores... cool
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#2894691 - 12/08/17 07:37 AM Re: The longest Deathwatch [Re: whitefang]
Winston Psmith Offline
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Registered: 02/15/10
Posts: 3208
Loc: Inside the Beltway
They opened a new store blocks from where I live, and they're planning to open one in downtown Washington, D.C., within the year. FWIW, there are NO full-service Music stores in D.C., period, so that might be a strong market move for them. Right now, if you live in D.C., and you're a Musician, you have to go out into one of the suburbs to go Guitar (or Bass, Drum, Keyboard) shopping, unless you haunt the surviving pawn shops.

OTOH, I don't see a lot of business at my nearest GC, even with the holiday buying frenzy everywhere else? They seem to discount their Used Gear pretty quickly, in an effort to move it, a good thing for me, maybe not so much for their bottom line.

All in all, it seems out of balance: They keep opening more stores, even though the ones they have don't seem to be thriving, except maybe in a few prime markets? Somehow, they're still in a position to make exclusive deals with manufacturers, like those super-cheap T.C.Electronics pedals that I don't see anywhere else. Can't say I'd miss them much if they closed, but I'd feel bad for all the folks out of work.
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#2895011 - 12/10/17 02:40 PM Re: The longest Deathwatch [Re: Winston Psmith]
d Offline
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Registered: 03/20/01
Posts: 6161
Loc: no longer lexington, Kenfunky,...
I don't think I've ever actually been into a GC but they serve a purpose...one forgotten factor (& it may not really apply here, I don't know) is some where in the org there are some ppl actually motivated by promoting musical instrument ownership, not just profit maximization.

As per "learning from previous financial crises" or other socio-political aspects of economics & , at risk of bumping up against the political reality of these days, I'd suggest that a great many learned from the last recession but unfortunately it wasn't the general mass of voters who continue to believe that international corporations will actually invest in lower tier workers or that job growth in a non-tech world's gonna ever be the way it it used to.
"Trickle down" or any similar idea's got 1/2 a century record of unlikelihood.
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#2895052 - 12/11/17 04:48 AM Re: The longest Deathwatch [Re: d]
whitefang Offline
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Registered: 05/13/02
Posts: 10005
Loc: Lincoln Park, MI, UNITED STATE...
Originally Posted By: d
As per "learning from previous financial crises" or other socio-political aspects of economics & , at risk of bumping up against the political reality of these days, I'd suggest that a great many learned from the last recession but unfortunately it wasn't the general mass of voters who continue to believe that international corporations will actually invest in lower tier workers or that job growth in a non-tech world's gonna ever be the way it it used to.
"Trickle down" or any similar idea's got 1/2 a century record of unlikelihood.


Can't honestly dispute that d. I can only add that while some people did learn from those past financial woes, it wasn't the ones who SHOULD have learned. And it's MORE than the "general mass of voters". It's also the JERKS they VOTE for! mad

And it seems that what's also not been learned is that with a "trickle down" theory of economics it's usually someone HIGHER UP that's controlling the flow. And when it fails( which it always does) they'll just blame their political opponents or the Chinese or something. smirk
Whitefang
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I started out with NOTHING...and I still have most of it left!

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#2895060 - 12/11/17 06:16 AM Re: The longest Deathwatch [Re: whitefang]
J. Dan Offline
Bannination Free Since '08
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Registered: 07/25/08
Posts: 11316
Loc: St. Louis, MO
I have a friend who owns a music store. Before GC came to town, he was one of the 2 main music stores in town. He was already feeling the heat from online retailers, and when GC came to town, that pretty much put the final nail in the coffins of several local stores.

He managed to stay in business by changing his business model. Basically, he said there is no margin on the big ticket items like guitars and keyboards. The online retailers have the margins so slim that they don't make much and if they try to charge more, people will just buy online.

He made sure they had a healthy business of music lessons because when kids are coming in all the time for their lessons, they'll buy strings, reeds, cork grease, cables, straps, etc. which are the high profit margin items. He also switched focus to fixed-install business at churches, schools, etc where they needed a bit more consulting and service.

So the funny thing is that what kept him in business is almost the opposite business model of GC. They carry huge inventory of low margin high dollar items that mostly just sit there on display and usually don't mess with school band instruments or lessons, and don't do any kind of consulting or service type work.
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Dan

Acoustic/Electric stringed instruments ranging from 4 to 230 strings, hammered, picked, fingered, slapped, and plucked. Analog and Digital Electronic instruments, reeds, and throat/mouth.

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#2895148 - 12/11/17 11:13 AM Re: The longest Deathwatch [Re: whitefang]
p90jr Offline
MP Hall of Fame Member

Registered: 11/21/07
Posts: 2895
Originally Posted By: whitefang
Seems unrelated (but isn't actually), but the businesses that seem to be "booming" in this day and age of iNet buying, are UPS and FEDEX. In both delivering items sold online and returning them when some are found to be defective. I don't get it. It's LESS trouble for me to go to the store, try something on, try it out, see if it's something I really want, than unpacking, repacking and driving to the UPS store or wherever you take items to deliver by FedEx. And all because I bought something online, and just because I CAN. I go through enough anxiety whenever I (rarely) buy anything from a CATALOG. But THAT'S only if I can't find the item in any local store.

Anyway, GC might find a way to survive ala the REVERB method. Strictly online sales. It's their EMPLOYEES that'll likely do most of the suffering. Oh, and OTHER businesses that are picking up are those that offer various security camera systems because there's been a sharp increase of UPS, AMAZON and FedEx packages being stolen off of porches whenever they deliver items when nobody's home. I don't know WHEN they stopped going to the next door neighbor and asking if THEY would take the package and hold it until the person who it's for gets home. I've babysat many a box for my neighbors over the years. No bother at all. wink
Whitefang


Guitar Center owns Musician's Friend... which is their online company, but GC also does online sales.

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#2895151 - 12/11/17 11:18 AM Re: The longest Deathwatch [Re: J. Dan]
p90jr Offline
MP Hall of Fame Member

Registered: 11/21/07
Posts: 2895
Originally Posted By: J. Dan
I have a friend who owns a music store. Before GC came to town, he was one of the 2 main music stores in town. He was already feeling the heat from online retailers, and when GC came to town, that pretty much put the final nail in the coffins of several local stores.

He managed to stay in business by changing his business model. Basically, he said there is no margin on the big ticket items like guitars and keyboards. The online retailers have the margins so slim that they don't make much and if they try to charge more, people will just buy online.

He made sure they had a healthy business of music lessons because when kids are coming in all the time for their lessons, they'll buy strings, reeds, cork grease, cables, straps, etc. which are the high profit margin items. He also switched focus to fixed-install business at churches, schools, etc where they needed a bit more consulting and service.

So the funny thing is that what kept him in business is almost the opposite business model of GC. They carry huge inventory of low margin high dollar items that mostly just sit there on display and usually don't mess with school band instruments or lessons, and don't do any kind of consulting or service type work.


This economic lesson was taught to me by Mrs. Cunningham on an episode of Happy Days where Mr. C was hospitalized and she had to run the hardware store... and she put the paint on sale for cost! I think it was $1 a can, usually sold for $2, and he lost his mind when he heard, then she brought him the books and she'd made a huge profit and had one of the best weeks in the store's history and he didn't understand how... and she explained to him she doubled the price of the paint brushes and other inexpensive things anybody doing any painting would need and nobody thinks about how much that stuff costs and it's all profit!

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#2895158 - 12/11/17 11:32 AM Re: The longest Deathwatch [Re: p90jr]
Larryz Offline
10k Club

Registered: 06/23/08
Posts: 10331
Loc: Northern California
It's sad when a GC comes to town and puts the mom and pops out of business. The little guy has trouble up against the big boxes who can run loss leader items at cost just to draw people in and make money on the condiment stuff like straps, strings, picks, etc. and perhaps talk the customer up to a little better model. All sorts of tricks in the books. I think the little guys could still compete in the used market up until GC started getting into it. Now with Ebay and Reverb and other on-line places to market used equipment, some of those little guys are back in business...especially those with fix-it know how...

Not sure how the used market is going with GC as they turned in this direction too? The big box brick and mortar rent is a major factor on their bottom line these days... cool
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Take care, Larryz

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#2895168 - 12/11/17 12:18 PM Re: The longest Deathwatch [Re: Larryz]
d Offline
MP Hall of Fame Member

Registered: 03/20/01
Posts: 6161
Loc: no longer lexington, Kenfunky,...
Not being familiar w/them particularly, as said, I didn't realize GC had this "WalMart" style of local effect.
Do they get tax abatements too ?
Is that part of what keeps them in biz ?
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#2895177 - 12/11/17 01:13 PM Re: The longest Deathwatch [Re: Larryz]
J. Dan Offline
Bannination Free Since '08
10k Club

Registered: 07/25/08
Posts: 11316
Loc: St. Louis, MO
Originally Posted By: Larryz
I think the little guys could still compete in the used market up until GC started getting into it. Now with Ebay and Reverb and other on-line places to market used equipment, some of those little guys are back in business...especially those with fix-it know how...

Not sure how the used market is going with GC as they turned in this direction too? The big box brick and mortar rent is a major factor on their bottom line these days... cool


Not sure if Music Go Round is considered a little guy, but see my recent threads on purchases I made there. On those, I did not mention that I had also stopped in GC a few times. Much larger and better selection for better prices at Music Go Round and the staff was very attentive and friendly and encouraging in terms of hooking stuff up and trying it out. GC has a closet with some overpriced used stuff in it.
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Dan

Acoustic/Electric stringed instruments ranging from 4 to 230 strings, hammered, picked, fingered, slapped, and plucked. Analog and Digital Electronic instruments, reeds, and throat/mouth.

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#2895188 - 12/11/17 01:49 PM Re: The longest Deathwatch [Re: J. Dan]
CEB Offline
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Registered: 06/03/09
Posts: 12551
I hope they hold on. I hardly ever buy anything new there but if I'm looking for something specific I search GC's used inventories. I've bought a bunch of used pedal doo-dads and my Cordoba Gypsy Kings flamenco guitar came used from GC. On of my Pedal Steel amps was used from GC. So far I have never gotten burned. All the purchases have worked out.


Edited by CEB (12/11/17 01:51 PM)
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#2895228 - 12/11/17 04:35 PM Re: The longest Deathwatch [Re: J. Dan]
Larryz Offline
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Registered: 06/23/08
Posts: 10331
Loc: Northern California
Originally Posted By: J. Dan

Not sure if Music Go Round is considered a little guy, but see my recent threads on purchases I made there. On those, I did not mention that I had also stopped in GC a few times. Much larger and better selection for better prices at Music Go Round and the staff was very attentive and friendly and encouraging in terms of hooking stuff up and trying it out. GC has a closet with some overpriced used stuff in it.


Yeah, I remember your posts on this business. I looked up the nearest one to me and it's located in Stockton, CA. It's a couple of hours away, but if I get down there for any reason, I'll make it a point to drop in and pack a few of my guitars with me! thu
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