The longest Deathwatch

[DocPate]

True Winston. I don't get why reissuing an instrument with a vintage date (whatever that means) makes it special. That date is long gone along with the materials and Craftsmen who made the original. I call BS

[p90jr]

As a graphic designer, the fact that they're printing those brochures in the hundreds of thousands means the per unit cost is probably 3¢.

 

But they know making it more like an issue of a guitar magazine with a pro and drool-worthy, out-of-99%-of the customers' price range guitars means that people actually go through it instead of instantly throwing it out! And they're making their money on the guitars in the centerfold, which probably have healthier margins.

 

Another weird rule of retail: nobody will buy cheap stuff from a store only stocked with cheap stuff... my wife and I buy necessities (toiletries, detergent, etc.) at the local Dollar Store where it's much cheaper, and which most people we know wouldn't be caught dead in... No GC outside of the Sunset Strip and Times Square will have even one of those pricey guitars pictured in his feature, but it makes kids dream. I suspect they didn't spotlight the guitars he actually seems to play the most - Fano - because they don't carry them.

[p90jr]

Gibson's troubles also aren't because of guitar sales but Henry's quest to turn it into a "lifestyle electronics brand," like Apple. He's bought Philips to get home audio stuff and other commercial audio brands... the company is in heavy debt because he leveraged too much to buy up those companies and then didn't seem to really have any vision about how to even proceed with what he was after.

[Scott Fraser]

To add to the absurdity . . .

Just got a new Spring catalog from GC, 55 pages, full color catalog, which can't be cheap to begin with, especially if you're sending out a few thousand. This issue features a bunch of gear favored by Jared Scharff, who plays Guitar in the current Saturday Night Live band. First up is a D'Angelico for $1799.99; that turns out to be one of the less expensive Guitars featured.

Next page features a Gibson "True Historic 1957 Les Paul Reissue" for $6899.99, or you can get the limited-run 1959 RI for $10,648.99. A few pages later, there is a throughly beat-to-hell "1957 Heavy Relic Stratocaster", where a vestige of the old Paisley pattern clings desperately to a $4899.99 travesty.

You get the idea; most of the Guitars featured are well over $1000. The centerfold features a number of affordable Guitars, like an Epi LP for $599.99 and a Jackson Dinky for a humble $269.99, but most of the Guitars featured run somewhere between $1100 and $3000; not exactly impulse buys, even for a pro player.

I don't know who they think is going to come running with $$$ in hand, to buy these (IMHO) over-priced Guitars, or why they spent the money to print and mail this catalog? I also don't understand why Gibson is sending them $10,000+ Guitars, when it seems like they can't move enough $1,000 Guitars to stay solvent? Maybe we're all nuts, and this is really how business works . . .

 

I don't get how any business can justify full color mail catalogs anymore. But I'm betting Gtr Ctr targets these to people who have at least purchased a guitar from them in recent years. I figured that's why I got one. The string & accessory customers probably don't get the catalog.

[p90jr]

I get one... my wife throws them out instantly... I've never bought more than strings and accessories at GC. I have bought stuff from Musician's Friend, which is the same company, so maybe there's a bleed over... but a coworker who has only ever bought strings from any music store (he inherited guitars and amps) gets them, brings them in and puts them on my desk.

 

Like I said, at the volume they print them the per unit cost is nothing... and they have an enormous advertising budget and an in-house advertising design department. If they didn't do things like that then someone would freak out about the chain's visibility and marketing efforts.

[p90jr]

Also, as this is the most important thing: GC isn't in trouble because of sales... when they talk about "instrument sales receding" they mean each new year doesn't bring more and more customer growth...

 

They're failing because Bain Capital set them up to fail... it's pretty much a scam pulled on investors.

 

Rolling Stone: Why Private Equity Firms like Bain Capital are the Worst of Capitalism

 

GC cannot be saved... it's impossible. Someday soon one of the suckers... I mean investors will just decide it's time to face the music and call in the chips, and the entire thing will collapse. Not spending $10,000 on this quarter's brochure will not put a dent in the $1Billion debt they have... it will just diminish sales for that quarter and make those investors even more fidgety that they aren't trying.

[p90jr]

I can't remember if I mentioned here before, but if you want a peek into the insanity of 90s high finance and corporate growth obsession paired with a subject you'll probably love watching, check out the documentary "All Things Must Pass: The STory of Tower Records."

 

Why, here it is, now... in an annoying format, but you can watch it normally if you have Showtime or Amazon Prime Video:

 

[video:youtube]https://www.youtube.com/watch?v=RUItFQq4u_o

[p90jr]

Bain Capital Debt Strikes Sour Note at Guitar Center

 

"the private-equity playbook of 'pump it full of debt, show a lot of topline growth, take it back public, charge a bunch of management fees' isnt sustainable in the age of diminished consumer spending."

 

 

[Winston Psmith]

As a graphic designer, the fact that they're printing those brochures in the hundreds of thousands means the per unit cost is probably 3¢.

 

But they know making it more like an issue of a guitar magazine with a pro and drool-worthy, out-of-99%-of the customers' price range guitars means that people actually go through it instead of instantly throwing it out! And they're making their money on the guitars in the centerfold, which probably have healthier margins.

 

I'm always willing to take the word of someone who's worked in a trade, so I'll admit I'm probably way off on the cost of printing & mailing those catalogs.

 

I also agree, I'm not likely to be able to walk into any GC within 100 miles, and find one of those $10,000+ custom Gibson RI's hanging on the wall; those are showpieces, going to showroom stores, not some little mall outlet in the suburbs. However, I still don't see how a catalog full of Guitars hardly anyone can realistically afford is going to draw in young players? If I were just starting out as a young musician, and I saw those prices, I'd probably give up on the Guitar and get a cheap Keyboard, or a DJ rig.

[Dannyalcatraz]

They dont see the prices. They see themselves playing the guitars.

 

Your dont sell the steak, you sell the sizzle.

[whitefang]

Scott's comment about "full color mail catalogs" was interesting because I get tons of them from many different businesses, so they must work out well for some. Like FINGERHUT, SEVENTH AVENUE, GINNY'S, COUNTRY DOOR, MASON SHOES and the dozen or more other places that clutter up my mailbox with their catalogs mailed to my house about three or four times a year.

 

Never got one from GC though. At least, not YET.

Whitefang

[Larryz]

I get catalogs from SW at least once a year. I breeze through them and toss them in the recycle bin. I don't mind seeing new stuff but that is a lot of wasted paper as they are very thick and must cost a lot to mail. I can see anything I'm interested in at their on-line site so I wish they would save the trees and their money...I get a thick one from Cabela's too, that also gets tossed.

[Scott Fraser]

Apparently companies can afford this & not feel any need to cull their address lists. More than four years after my wife's passing I still receive numerous women's wear catalogs, not a one of which addresses the question of why they have had no orders from her. It's a mystery to me as to how any company can justify such waste. Does it really cost more to assign somebody to trim an address list to only include active customers?

[Winston Psmith]

I used to get catalogs from Sound Forge, presumably because I subscribe to Electronic Musician magazine: thing is, they're Windows-only software. I was never going to buy anything for them, so I called the 800 number, and told them they were wasting their money on me. The person on the other end thanked me, and I've never seen another catalog.

[Larryz]

+1 Scott, the two companies that I mentioned have me on their email list and send me promotions and sales info from time to time electronically. They could have an "unsubscribe" button for the catalog and not even have to pay anyone to delete the mailers. Just think of how many trees they could save...it's a good thing Amazon doesn't mail out a catalog LOL!

[p90jr]

Scott's comment about "full color mail catalogs" was interesting because I get tons of them from many different businesses, so they must work out well for some. Like FINGERHUT, SEVENTH AVENUE, GINNY'S, COUNTRY DOOR, MASON SHOES and the dozen or more other places that clutter up my mailbox with their catalogs mailed to my house about three or four times a year.

 

Never got one from GC though. At least, not YET.

Whitefang

 

I think it's Restoration Hardware that sends us a shrinkwrapped bundle of about 5 huge catalogs once a year... I look through them in amazement, my wife will take them out of my hands to put in the recycling bin. Neither of us have ever ordered anything from that company, yet we each get one of the huge bundles every year.

[p90jr]

As a graphic designer, the fact that they're printing those brochures in the hundreds of thousands means the per unit cost is probably 3¢.

 

But they know making it more like an issue of a guitar magazine with a pro and drool-worthy, out-of-99%-of the customers' price range guitars means that people actually go through it instead of instantly throwing it out! And they're making their money on the guitars in the centerfold, which probably have healthier margins.

 

 

I'm always willing to take the word of someone who's worked in a trade, so I'll admit I'm probably way off on the cost of printing & mailing those catalogs.

 

I also agree, I'm not likely to be able to walk into any GC within 100 miles, and find one of those $10,000+ custom Gibson RI's hanging on the wall; those are showpieces, going to showroom stores, not some little mall outlet in the suburbs. However, I still don't see how a catalog full of Guitars hardly anyone can realistically afford is going to draw in young players? If I were just starting out as a young musician, and I saw those prices, I'd probably give up on the Guitar and get a cheap Keyboard, or a DJ rig.

 

I also suspect that companies pay for "featured pages" within the catalog, which are pretty much ads... Notice Gibson/Epiphone and Fender, etc., have their own sections in every section, not sharing pages with other brands, and even with breakout features and articles on new products or something. GC, etc., might not be footing the bill for printing... they may be making a profit!

[zeronyne]

I've worked for GC, Toys R Us, Kaybee Toys, and Sears Holdings, each eventually at a management level or above, and I'd like to mention a few things.

 

1. p90jr's statements are dead on about Bain Capital. As soon as they started playing the shell game with debt, GC's slow death sentence was signed and sealed.

 

2. Printed mailers still make a huge impact for some retailers despite how inefficient it is. Sears and Kmart, until this year, spent close to $250,000.00 PER QUARTER on mail and print, and that's a quarter mil for each company per quarter. The response? about 5% increase in conversion, which is actually really high for direct mail...like five times the average and ten times the response for a television ad. I can't speak for GC, but Sears would have already gone under if they lost that 5% in cash flow despite getting deeper in debt every day. And again, P90jr may be correct that the vendors subsidize the print costs for GC and maybe even Sweetwater.

 

3. GC's demise, if it actually occurs, will be a real problem for guitar manufacturers and sound reinforcement manufacturers. The pro audio, software, and electronics companies will be fine. If GC's existing stock gets actually liquidated, it will bottom out value for entry level guitars for years. I have no idea what will happen to drums...both of my girls are serious drummers, but I would never consider buying a kit from a GC unless it was some used gem.