The No.1 Website for Pro Audio
GUITAR CENTER files Chap 11
Old 29th October 2020
  #1
Lives for gear
 

GUITAR CENTER has NOT filed the BK papers Yet....BUT.....

Well, its not surprising. Every GC thats not in Manhattan or Hollywood has next to nothing in the store. Horrible customer experience, bloated capital structure, missed an October interest payment, and Mr Fragmastanz always wants his. They are offering Debt for Equity swaps. 1.4 Billion in Liabilities.

Someone will Buy it, But alot of GCs in smaller cities ain't coming back.

District managers on down will be looking for work.

Its good for smaller shops. Apparently, Guitars are selling like hotcakes during the Pandemic?

I wouldn't Know. Havent been out in months....

Last edited by UKMK00; 29th October 2020 at 03:57 PM.. Reason: Premature Ejack
Old 29th October 2020
  #2
Have they actually done it now? Latest news I've seen was that it was still being threatened, but not actually executed yet...
Old 29th October 2020 | Show parent
  #3
Lives for gear
 

Quote:
Originally Posted by Whitecat View Post
Have they actually done it now? Latest news I've seen was that it was still being threatened, but not actually executed yet...

November 15 filing date. Negotiations to restructure 1.4 Billion in debt are ongoing....
Old 29th October 2020 | Show parent
  #4
Lives for gear
Quote:
Originally Posted by UKMK00 View Post
November 15 filing date. Negotiations to restructure 1.4 Billion in debt are ongoing....
Cite a source, as all other credible news sites are still only saying they're preparing to file.
Old 29th October 2020 | Show parent
  #5
Lives for gear
 

Quote:
Originally Posted by nedorama View Post
Cite a source, as all other credible news sites are still only saying they're preparing to file.
https://www.musictrades.com/news4.html


I am also connected to the Finance Industry. I know bond holders involved in the filing. Its happening.
You will see small GCs disappear. 2.3 Billion in revs last year. So, they wont go away.
They will have to become smaller tho...
Old 29th October 2020
  #6
Lives for gear
 
gsilbers's Avatar
 

Quote:
Originally Posted by UKMK00 View Post
Well, its not surprising. Every GC thats not in Manhattan or Hollywood has next to nothing in the store. Horrible customer experience, bloated capital structure, missed an October interest payment, and Mr Fragmastanz always wants his. They are offering Debt for Equity swaps. 1.4 Billion in Liabilities.

Someone will Buy it, But alot of GCs in smaller cities ain't coming back.

District managers on down will be looking for work.

Its good for smaller shops. Apparently, Guitars are selling like hotcakes during the Pandemic?

I wouldn't Know. Havent been out in months....
true . Dunno how GC thought this wasnt going to happen.
The "sales" poeple on the floor are almost teenagers trying to get commision on a sale.
Their online precence also is lackluster.
Its mostly empty inside most of the time. specially outside big metro areas.
Their is a huge section for live sound which i dont think ive seen anyone there ever.
list goes on.


do you really think itll be bought by someone and brought back?
I say mostly because guitar based music in the industry as a whole has been in decline for such a long time, and Guitar center is not exactly an amazing brand. Sure, there is a store in every city over 100k people, but still.
MARS music at this point might be better


But dunno much about debt restructuring and all that. Seems it went well for gibsons (still ongoing).
Cant fathom the idea of a company like GC owing billions in debt.. and not having thought about closing when seems wherent going that well like a decade ago. But same thing with JCpenny. Its like they expect some sort of amazing transofrmation and turnaround like an a plot from an 80s movie or something.
Old 29th October 2020 | Show parent
  #7
Lives for gear
 

Quote:
Originally Posted by gsilbers View Post

do you really think itll be bought by someone and brought back?
I say mostly because guitar based music in the industry as a whole has been in decline for such a long time, and Guitar center is not exactly an amazing brand. Sure, there is a store in every city over 100k people, but still.
MARS music at this point might be better

GC is still a potent retail entity. $2.3 billion in revenue, with $185,000,000 in EBITDA last year, which is the money left over after bills are paid but before interest and debt service, and depreciation on equipment.

There is enough there for someone to make money. Vendors like Fender, Gibson, Korg, who is the parent company of Marshall are gonna take a hit.

Those teenagers working for commish are gone.

As are GC stores in small Cities like Raleigh NC, Duluth MN, and Destin FLA.
Old 29th October 2020 | Show parent
  #8
Quote:
Originally Posted by UKMK00 View Post
Korg, who is the parent company of Marshall are gonna take a hit.
Suspect you mean Vox, not Marshall, but otherwise I agree with all of it. The Fender and Gibson boards are going to be having a few sleepless nights right now especially - a lot of good work they will have done this year will be erased with a couple court filings.
Old 29th October 2020 | Show parent
  #9
Lives for gear
Quote:
Originally Posted by UKMK00 View Post
November 15 filing date. Negotiations to restructure 1.4 Billion in debt are ongoing....
Oh no. That is not good.

GC provides a lot for many musicians, employees and manufacturers. Like em or hate em, they provide a lot of services that will go unfilled for many people.

I hope they get it back together and get solvent.
Old 29th October 2020 | Show parent
  #10
Lives for gear
 

Quote:
Originally Posted by Whitecat View Post
Suspect you mean Vox, not Marshall, but otherwise I agree with all of it. The Fender and Gibson boards are going to be having a few sleepless nights right now especially - a lot of good work they will have done this year will be erased with a couple court filings.
Marshall ended the Korg arrangement in 2010. Forgot about that...
Old 30th October 2020
  #11
Lives for gear
 

Well, maybe Mars Music will return.
Old 30th October 2020
  #12
Lives for gear
 
lame pseudonym's Avatar
 

So now the mom-and-pop stores will be the only choice for people who want to just go and fart around with guitars and maybe buy one.

My hometown has stores that will be fine: House of Guitars and Sound Source. But it seems like a diminution in the quality of life for most people.

Of course most of the people who are interested in farting around with guitars and maybe buy one are in Dad Bands.
Old 30th October 2020 | Show parent
  #13
Gear Guru
 
Brent Hahn's Avatar
Quote:
Originally Posted by lame pseudonym View Post
Of course most of the people who are interested in farting around with guitars and maybe buy one are in Dad Bands.
Is there something wrong with that?
Old 30th October 2020
  #14
Lives for gear
 
AfterViewer's Avatar
 

There is a Guitar Center about fourteen miles from my house, haven't been over there for many years. Going to make it a point to drop in for some memento guitar picks.

Last edited by AfterViewer; 31st October 2020 at 07:45 AM..
Old 30th October 2020
  #15
Lives for gear
I hope they get it together. A lot of that debt may be to the very instrument makers we really love. Not having a major 'big box' music store locally is going to be a real drag. Unlike most mom and pops, you can see a LOT of stuff under one roof. You can also get access to a national list of used gear that you don't have to worry about being scammed or dealing with eBay or reverb with. If you want to return your item at a Guitar Center - they give you a generous 45 days to return, just take it back to the store. There is no extra cost of shipping it back (which can be high if it is a heavy item like an amp).

Often, GC will create their own cool guitars with a manufacturer. GC did a really cool Martin 000 and a Fender Tele with a solid rosewood neck in the last few years. Now, other re-sellers will do this but I can not just drive down the street 20 mins and go try it out.

While many will complain about some GC stores having younger less informed employees, what we don't often hear about are the older local musicians who work there who can be extremely helpful. There is a guy in the Portland ME, store who is just wonderful.

The USA is so blessed to have these big box stores in plenty, with most everything under the sun, all across the country.
Old 30th October 2020 | Show parent
  #16
Lives for gear
Dad Band.

Quote:
Originally Posted by Brent Hahn View Post
Is there something wrong with that?
Why yes! it's more cool to be in a Mom band in the 20's.
Old 30th October 2020
  #17
Gear Maniac
 
vashuba's Avatar
I grew up going to GC, it was my Toy's R US, which has also closed. I have bought a few duds in the used department but have never had any problems with returning it. Their used site the my favorite, you can find some rare/hard to find stuff if you look hard enough.
Old 30th October 2020 | Show parent
  #18
Lives for gear
Quote:
Originally Posted by vashuba View Post
Their used site the my favorite, you can find some rare/hard to find stuff if you look hard enough.
Absolutely agree! It's is still one of the very best places to find used gear. While you won't be able to haggle the price down, the prices are fairly on target and will come down with time sitting there with no buyers.

Unlike ebay or reverb, you could return the item at a local store. Some people trade in some great high end gear as a way to get rid of it quickly for cash or trading. It's a very needed service on both ends.

I found some rather difficult to find high end stuff there in the used departments. It came from another state but the shipped it to me or directly to the store.
Old 30th October 2020 | Show parent
  #19
Lives for gear
 

Quote:
Originally Posted by gsilbers View Post
true . Dunno how GC thought this wasnt going to happen.
The "sales" poeple on the floor are almost teenagers trying to get commision on a sale.
Their online precence also is lackluster.
Its mostly empty inside most of the time. specially outside big metro areas.
Their is a huge section for live sound which i dont think ive seen anyone there ever.
list goes on.


do you really think itll be bought by someone and brought back?
I say mostly because guitar based music in the industry as a whole has been in decline for such a long time, and Guitar center is not exactly an amazing brand. Sure, there is a store in every city over 100k people, but still.
MARS music at this point might be better


But dunno much about debt restructuring and all that. Seems it went well for gibsons (still ongoing).
Cant fathom the idea of a company like GC owing billions in debt.. and not having thought about closing when seems wherent going that well like a decade ago. But same thing with JCpenny. Its like they expect some sort of amazing transofrmation and turnaround like an a plot from an 80s movie or something.

I don’t love or shop GC but something to consider is this is largely an investor problem, not an individual store or even the brand at fault - opening too many stores to quickly, etc...that is where the debt came from. Some investment companies are famous for doing this to other brands as well.

Too bad for the people that work there, and I live in KC where a Guitar Center warehouse as well as Musicians Friend, so there is some local impact here.
Old 30th October 2020 | Show parent
  #20
Gear Guru
 
Brent Hahn's Avatar
Quote:
Originally Posted by kslight View Post
I don’t love or shop GC but something to consider is this is largely an investor problem, not an individual store or even the brand at fault - opening too many stores to quickly, etc...that is where the debt came from.
Well maybe. I would've bet on GC to bounce back nicely once the interstate sales tax loophole was closed. And if GC can survive Covid, survival being the reason Chapters 7 and 11 exist, I'd still make that bet.

When the vaccine finally comes, live music will be one of the New Fun Things.
Old 30th October 2020 | Show parent
  #21
Lives for gear
 

Quote:
Originally Posted by Brent Hahn View Post
Well maybe. I would've bet on GC to bounce back nicely once the interstate sales tax loophole was closed. And if GC can survive Covid, survival being the reason Chapters 7 and 11 exist, I'd still make that bet.

When the vaccine finally comes, live music will be one of the New Fun Things.

GC will survive. With less stores and less payroll.

Had to happen.

One thing they could easily improve is their online presence and what they look like in the online space.

The used website experience is ragged, to say the least.

I like GC. If you know what you are looking for, and have done some research, its a good brick and mortar option...
Old 30th October 2020 | Show parent
  #22
Lives for gear
 

Quote:
Originally Posted by kslight View Post
I don’t love or shop GC but something to consider is this is largely an investor problem, not an individual store or even the brand at fault - opening too many stores to quickly, etc...that is where the debt came from. Some investment companies are famous for doing this to other brands as well.

Too bad for the people that work there, and I live in KC where a Guitar Center warehouse as well as Musicians Friend, so there is some local impact here.
At this level, when things become "Investor Problems", they inevitably will become a "Brand Problem".

The first indication is Debt for Equity swaps.

Mr. Fragmastanze will be more than happy to take a piece of this $2.3 billion retail Brand.

The people who make GC run on a daily basis are gonna take the brunt of of it.
Old 30th October 2020 | Show parent
  #23
Gear Head
Quote:
Originally Posted by UKMK00 View Post
GC will survive. With less stores and less payroll.

Had to happen.

One thing they could easily improve is their online presence and what they look like in the online space.

The used website experience is ragged, to say the least.

I like GC. If you know what you are looking for, and have done some research, its a good brick and mortar option...
This is just what I was going to speak about.
I feel confident if their website was redesigned, and more user friendly, then their sales would be much better. Sweetwater is doing just fine. I'm guessing many more people order online from Sweetwater, and they have basically the same products available while having the same return policy. I'll admit Sweetwater is where I go to browse or shop almost all the time, and it's pretty much because of their website design. I've always hated going to the Guitar Center website.
I understand some of the problem is coming from lack of sales in stores, but I feel a better website would also improve that to an extent. I'm in disbelief they haven't thought of this already.
Old 30th October 2020 | Show parent
  #24
Lives for gear
 
gsilbers's Avatar
 

Quote:
Originally Posted by CaviT View Post
This is just what I was going to speak about.
I feel confident if their website was redesigned, and more user friendly, then their sales would be much better. Sweetwater is doing just fine. I'm guessing many more people order online from Sweetwater, and they have basically the same products available while having the same return policy. I'll admit Sweetwater is where I go to browse or shop almost all the time, and it's pretty much because of their website design. I've always hated going to the Guitar Center website.
I understand some of the problem is coming from lack of sales in stores, but I feel a better website would also improve that to an extent. I'm in disbelief they haven't thought of this already.
AND
somehow leveraging the physical store with the online store. Coupons, lessons,
concerts, talks, masterclasses, etc. From getting coupons in store for the online store to getting info and discounts on events etc from the website to the store.
Even get youtubers (or employees) to do reviews at the store with so much space they have in that live sound area, and get affiliate commissions..
So many oportunities wasted. Theyve seen to just be on auto pilot pushing the same things the same way since the 90s. Even their studio equipment dept is faceplates and setups that work.
How hard would it be to have a speaker try out that works, with manufacturing copouns for online discounts so you can complete the sale online. And after purchasing get a discount for lessons again at the store. or discount on strings etc at the store.
Again, so many oportunities.
Old 30th October 2020
  #25
Lives for gear
Too many fiefdoms. the fact that Guitarcenter.com is not attached to Musicansfriend.com makes no sense - and per their team, there's very little customer overlap.

Had they adopted "buy online, pickup in store" for both websites, they could have had an advantage over Sweetwater in the "get it now" on common items.

But Guitar Center, Arts & Music (school instrument sales & rentals) and Musicians Friend were run as 3 completely separate companies. Bad management, and not from private equity - it was just that the old company had built up kingdoms in different areas and no one wanted to give up power.
Old 31st October 2020 | Show parent
  #26
Lives for gear
 
lame pseudonym's Avatar
 

Quote:
Originally Posted by Brent Hahn View Post
Is there something wrong with that?
Who ever said that?

It is chronic here that when I think that something is intriguing or amusing, and I express it, people think that I am complaining. I am not complaining.
Old 31st October 2020 | Show parent
  #27
Lives for gear
 
lame pseudonym's Avatar
 

Quote:
Originally Posted by CaviT View Post
This is just what I was going to speak about.
I feel confident if their website was redesigned, and more user friendly, then their sales would be much better...
Let's talk about that.

I visit their used-gear site fairly often, and the morons never fixed the site so it remembers my zip code. How stupid is that?

PS: This is a complaint.
Old 31st October 2020 | Show parent
  #28
Gear Nut
 
TomPaul's Avatar
Quote:
Originally Posted by UKMK00 View Post

As are GC stores in small Cities like Raleigh NC, Duluth MN, and Destin FLA.
There are 2 here in Pittsburgh. Can't see that continuing. I haven't ever bought anything from the stores other than strings or a pedal maybe. I did buy a producers desk from them on line this year.
Old 3 weeks ago
  #29
Lives for gear
 

Just got an email from GC formally announcing chapter 11 (reorganization)
Old 3 weeks ago
  #30
Lives for gear
 
Progger's Avatar
I'm curious to see how this develops.

I grew up in Albuquerque in the '90s, during which time there was no Guitar Center -- they got one in the early '00s. So instead, we had our local shops like Luchetti Music and Grandma's to bum around in when I was in high school, making friends with the staff and having somewhere to go that was fun and reasonably safe. Guitar Center put a serious hurt on those stores, causing most of them to close, while providing generally worse service: a much bigger selection, for sure, but all the guitars and basses were poorly set-up, and the staff were generally not as knowledgeable (or friendly) as our old haunts that had to close.

I, too, appreciate many things about big box stores, but my love for them is quite limited. I now live in a city with multiple locally owned business that have been putting Guitar Center to shame for a long time, and I like that fact. I feel for the GC employees who will be hurt by this, but I hope it allows some local businesses to thrive a bit more.
📝 Reply

Similar Threads

Thread / Thread Starter Replies / Views Last Post
replies: 153 views: 58808
Avatar for Lorenzop
Lorenzop 3rd November 2014
replies: 237 views: 51199
Avatar for Krubbadoo
Krubbadoo 1 week ago
replies: 753 views: 17604
Avatar for IncarnateX
IncarnateX 11 minutes ago
Post Reply

Welcome to the Gearslutz Pro Audio Community!

Registration benefits include:
  • The ability to reply to and create new discussions
  • Access to members-only giveaways & competitions
  • Interact with VIP industry experts in our guest Q&As
  • Access to members-only sub forum discussions
  • Access to members-only Chat Room
  • Get INSTANT ACCESS to the world's best private pro audio Classifieds for only USD $20/year
  • Promote your eBay auctions and Reverb.com listings for free
  • Remove this message!
You need an account to post a reply. Create a username and password below and an account will be created and your post entered.


 
 
Slide to join now Processing…
🖨️ Show Printable Version
✉️ Email this Page
🔍 Search thread
🎙️ View mentioned gear
Forum Jump
Forum Jump