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  1. #1
    Sinner's Swing! Dutchie5150's Avatar
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    Default Guitar Center on Way to Declare Bankruptcy

    From Blabbermouth:

    The world's largest chain of musical instrument retailers, Guitar Center, has been facing serious financial difficulties in recent times, with the majority of experts pointing out that a full crash is looming on the horizon and a bankruptcy announcement being only a matter of time.

    And as Forbes now reports, new document suggests that the company "might be readying itself to finally sink."

    Guitar Center was acquired by Bain Capital in 2007, along with a severe $1.6 billion debt. More recently, Bain's partner Ares Management turned the debt into equity, resulting in less inventory, fewer SKUs and fewer vendors.

    "Ares was allegedly very slow in negotiating a union contract with these stores and was then hit by an unfair practice charges by the Retail Workers Union to the National Labor Relations Board," the report reads.

    Analyst Eric Garland has been noting from the get-go that GC will probably never get out of the situation it dug itself into, and the latest evidence, a new employee agreement, reveals decreased sales commissions from 10% on profit and 2% on gross down to 0.25%.

    Additionally, Guitar Center has decreased the number of work hours both for salesmen and managers to the point where the inside joke is that the company is at "liquidation staffing" levels. Finally, the company has raised the cost for employees to purchase new gear, which is undoubtedly one of the key reasons for musicians wanting to work for the company, by 10 to 15%.

    "To say that this is bad for Guitar Center's business is an understatement. Unhappy employees lead directly to unhappy customers, something the company can ill-afford right now. While GC salesman have reaped a lot of abuse in the past for their lack of training and professionalism, the fact of the matter is that there are many that truly care about the customer and try their best to please," the report notes.

    "Treating them poorly is just another step towards forcing them out, only to have a new round of poorly trained replacements take their place. Of course, it's the customer that suffers in the end, which further hastens the company's downward spiral."

    Finally, author Bobby Owsinski concluded, "Guitar Center is an excellent example of financial engineering based on the type of greed that's all too common in big business today. The formula of acquiring a company for a minimum of cash and a load of debt, then using lean management techniques to make the company look profitable in order to sell to a bigger fish may well be the order of the day in most other industries, but the musical instrument industry is too small for that to work, as evidenced by GC's performance over the last eight years."

    http://www.ultimate-guitar.com/news/...t_reveals.html
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  2. #2
    Hot For Teacher
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    Could this mean some serious discounts on items if they close down?

  3. #3
    Eruption garbeaj's Avatar
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    Yay Mitt Romney. He said sarchastically.

    I doubt the entire chain will shut down anytime soon, but I would imagine that there might be some discounts to be had on certain items when they shut down some branches. There won't be any discounts on the really nice stuff though...for instance, a real Gibson Les Paul Standard (or another "real" Les Paul) will still be upwards of $3,000 and that won't be discounted.
    Last edited by garbeaj; 05.12.15 at 01:48 AM.

  4. #4
    Whoa, this is heavy! Jedi McFly's Avatar
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    Default

    Hasn't this article come out every six months for the last ten years?

    All I know is that they opened a Guitar Center near me 3 years ago and it's one of the best guitar stores I've been to. Guitar selection isn't great, but the entire staff is awesome. There's another Guitar Center about 45 minutes from me, and they have a better selection, but everybody that works there is a dickhead.

  5. #5
    Eruption
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    Default

    Quote Originally Posted by Jedi McFly View Post
    Hasn't this article come out every six months for the last ten years?
    There have been GC deathwatch threads on The Gear Page at least once a month for years. GC has been predicted to die and then beaten those predictions more than George Burns and Yassir Arafat combined.

  6. #6
    Atomic Punk japeape's Avatar
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    They ran Daddys Junky Music out of Boston, which was a New England staple.
    They also killed Steve's Music, in Danvers, which was another awesome gear shop.

    There's a Guitar Center next to Berklee school of music, and another bigger one about
    a mile away.

    I can't imagine having my sales commission reduced to THAT!

    Fuck 'em.

    Don't they also own Musician's Friend?

    They are competing with themselves online, which is exactly what my company
    is doing:

    "BUT IT'S CHEAPER ONLINE?!!!"

    I hear this ten billion times, every single day.

  7. #7
    Atomic Punk bsbll4's Avatar
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    I think Guitar Center has the same problem Best Buy does: they are the showroom for the internet.

    When you're a small mom and pop store people will feel loyalty to you and be willing to pay a small markup for a guitar or amp. When you are a giant franchise like Guitar Center people don't really care if the company is doing well.
    CNN may think my opinion matters, but you shouldn't.

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  9. #8
    Eruption AFU's Avatar
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    Default

    Quote Originally Posted by japeape View Post
    They ran Daddys Junky Music out of Boston, which was a New England staple.
    They also killed Steve's Music, in Danvers, which was another awesome gear shop.

    There's a Guitar Center next to Berklee school of music, and another bigger one about
    a mile away.

    I can't imagine having my sales commission reduced to THAT!

    Fuck 'em.

    Don't they also own Musician's Friend?

    They are competing with themselves online, which is exactly what my company
    is doing:

    "BUT IT'S CHEAPER ONLINE?!!!"

    I hear this ten billion times, every single day.
    They own music123 in Canada.

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  11. #9
    Atomic Punk RRvh1's Avatar
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    Quote Originally Posted by AFU View Post
    They own music123 in Canada.
    Music123 and Musician's Friend are one in the same , no ?
    "There's too many people on this basketball that's floating around the sun, who are too afraid to allow themselves to FEEL" - Edward Van Halen
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  12. #10
    Eruption
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    Default

    I buy at least one used guitar and one used amp at the local GC each year. I've only bought new stuff when I needed it in a rush and couldn't wait for shipping from MF.

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