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Author Topic: Beginning of the end of GC?  (Read 1963 times)

Offline gtrdave

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Beginning of the end of GC?
« on: March 05, 2014, 07:51:09 AM »
http://www.sfvbj.com/news/2014/mar/04/report-guitar-center-may-be-sold/

Guitar Center has been on the skids...mainly due to massive debt...for several years and their push to open new stores...one right here in Delaware...has not had the return-on-investment as expected, so their current owner is looking to hand the company and the debt off to one of the minor stakeholders and have them take over the sinking ship.
I don't have a crystal ball to be able to see the future, but my guess is that GC will be stripped down from its current bloated size and they might survive in a new/improved manner but only in thriving media-centric markets (LA, NYC, ATL, Chi-town, etc...).
Musician's Friend, Music 123 and Guitar Center online should merge into one (as they may already be as far as call centers and warehousing is concerned) and I can see them probably severing ties with Music and Arts store chain, although that relationship does give them the local school band rental and lesson income that GC seriously lacks.
Only the books will tell if that makes them money or not.
Music theory is not always music reality.

Offline funkStrat_97

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Re: Beginning of the end of GC?
« Reply #1 on: March 05, 2014, 10:31:47 AM »
Maybe not the end - at least not yet - but we'll see some store closures for sure.  Right here in Northern Virginia, we've got two that are fairly close to each other and I'm just waiting to see which one will go (my bet is on the smaller store).  The Internet has truly made it difficult for traditional brick-and-mortar retail to be profitable.
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Offline betnich

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Re: Beginning of the end of GC?
« Reply #2 on: March 05, 2014, 11:11:47 AM »
Hmmm...got a $10 e-gift from GC for filling out an online survey...maybe time to use it...
;)

Offline trackman

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Re: Beginning of the end of GC?
« Reply #3 on: March 06, 2014, 05:36:17 AM »
Makes sense... Guitar Center is the place I go to try what I'm going to buy on-line...
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Offline gtrdave

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Re: Beginning of the end of GC?
« Reply #4 on: March 06, 2014, 07:35:32 AM »
Makes sense... Guitar Center is the place I go to try what I'm going to buy on-line...

That is just one reason for their financial failings.
Another is that they're trying to sustain a brick and mortar sales model that worked well for them in California in the '80s and most of the '90s, but they failed to adapt to changing markets as they expanded throughout the U.S. (i.e. smaller markets = smaller stores) and they failed to reduce their tangible footprint while they grew their unified online presence.
WHY does GC possess 3 different and redundant online sales outlets? That's a total admin and data waste. GC online, MF and Music 123 should all be consolidated to MF since they probably have the best online customer reputation of the three.
A stripped down GC chain paired with MF as their online arm could probably be returned to profitability, but it's going to come at the cost of a lot of jobs.
Music theory is not always music reality.

Offline bill m

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Re: Beginning of the end of GC?
« Reply #5 on: March 06, 2014, 11:16:28 AM »
I had no idea they also had Music 123. I use to go into their stores when I lived in Ca.The service was usually terrible.They opened up a store here I Madison Wi. about 6 years ago and they haven't really changed all that much. They do however have the gear.There's so many choices now it's hard to say what will happen. I hate to see anyone go under.

Offline funkStrat_97

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Re: Beginning of the end of GC?
« Reply #6 on: March 06, 2014, 12:22:05 PM »
Makes sense... Guitar Center is the place I go to try what I'm going to buy on-line...

The late, great Boarders Books & Music faced an identical crisis......and look what happened to them.  As a model railroader, I can tell you that this is also a similar crisis among hobby shops.  Everything is on-line now.  When was the last time you've actually even seen a traditional hobby store?
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Offline funkStrat_97

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Re: Beginning of the end of GC?
« Reply #7 on: March 07, 2014, 08:16:19 AM »
“Don't bother to give God instructions, just report for duty”
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Offline A914Man

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Re: Beginning of the end of GC?
« Reply #8 on: April 28, 2014, 07:59:43 PM »
I have a friend that left MF a couple years ago.  He was upper management and told me the writing was on the wall as far as their future.

Offline Mysteryman

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Re: Beginning of the end of GC?
« Reply #9 on: May 13, 2014, 01:00:12 PM »
It would be cool if they had one large store in every state then a few smaller stores in those major cities that can get inventory from the larger store if needed.
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Offline funkStrat_97

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Re: Beginning of the end of GC?
« Reply #10 on: May 13, 2014, 07:06:11 PM »
It would be cool if they had one large store in every state then a few smaller stores in those major cities that can get inventory from the larger store if needed.

That's probably what they should've done in the beginning.  Not sure how well that strategy would work in this e-commerce/virtual world we live in.
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Offline gtrdave

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Re: Beginning of the end of GC?
« Reply #11 on: May 13, 2014, 07:42:18 PM »
That's probably what they should've done in the beginning.  Not sure how well that strategy would work in this e-commerce/virtual world we live in.

They have to be super competitive w/ prices in the stores.
I mean, it's almost stupid that GC doesn't just adhere to MF pricing since they're the same company. but there are still discrepancies between in-store prices and online prices.
Music theory is not always music reality.

Offline Mysteryman

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Re: Beginning of the end of GC?
« Reply #12 on: May 13, 2014, 09:02:54 PM »
That's probably what they should've done in the beginning.  Not sure how well that strategy would work in this e-commerce/virtual world we live in.
I would do online also so they could do store pickup or home. When it comes to instruments there are always those who want to try them out in person. At some point somethings will change to make in store purchasing more appealing than online.
Vision without action is just day dreaming. I miss practicing.

Offline 4hisglory

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Re: Beginning of the end of GC?
« Reply #13 on: May 13, 2014, 11:13:23 PM »
I never understood GC.  Why have 10 of the same instrument?  I prefer the mom and pop stores.
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Offline berbie

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Re: Beginning of the end of GC?
« Reply #14 on: May 14, 2014, 12:15:42 AM »
The major advantage that the internet houses have is that they don't collect sales taxes.  GC doesn't have that advantage since they have a brick and mortar store in so many cities, and when they do, they have to collect sales taxes on orders from those states. Other than that the prices are about the same, except in very small stores.  If they start requiring the internet houses to collect sales taxes, we will see a rise in the number of successful local stores.  For example, if you bought a $2500.00 keyboard in a local store in Arkansas, you would have to add on as much as $250.00 for taxes, according to which county you lived in.  If you bought from Musicians Friend,  you would pay no taxes during the transaction.  They have few local outlets so that would apply in most cases.

The same applies to Amazon.com. 

As it is now,  many go to the local stores to test instruments, and then buy them from the internet houses or a business like Amazon.com. 

Offline funkStrat_97

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Re: Beginning of the end of GC?
« Reply #15 on: May 14, 2014, 07:11:54 AM »
The major advantage that the internet houses have is that they don't collect sales taxes...

...at least not yet.  Uncle Sam will have the last say on that.
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