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The End Of Guitar Center (And An Irrational Addiction To Growth & The Scourge Of Unregulated Structured Finance)

Tyler Durden's picture




 

Authored by Eric Garland,

This is an obituary for Guitar Center, a chain of big box musical instrument stores that was captured and infected by private equity during a national trend of greed and reckless expansionism in the late-1990s and early-2000s. The company started as a Los Angeles organ store, became a successful purveyor of guitars after the Beatles arrived in the United States, evolved into a national competitor over a period of decades, and shall finish, with sad poetry, as the symbol of everything dysfunctional about American corporate finance, management, and retail in the modern age. Its demise is really the end of a generation of business managers, illustrating how they lost their moral compass as well as any ability to lead individual companies or national economies into a stable, rational, prosperous future. This story will focus on the final days of this one company, but it is really about our painful transition to an economic system that obeys objective reality and serves people in a durable, holistic manner.

The original sin, and events leading to collapse

I have been tracking the evolution of this company for over a year now, and the evidence is incontrovertible: the corporate entity known as Guitar Center, Inc. is in the midst of irreversible collapse dynamics and will cease to hold its position as the industry leader in the short-term. In the mid-term, the company may cease to operate as a going concern and will be reduced to a group of trademarks, service marks and patents that will be sold to a buyer with considerably different plans for the company. Its days as the national industry leader are over.

I shall support my thesis with easily accessible public information, though I also possess considerable insights from industry insiders who prefer not to be named. The idea that this is a doomed entity which can only submerge deeper into dysfunction and, ultimately, oblivion is not widely held. The vast majority of the musical instrument industry exhibits what we intelligence analysts call “normalcy bias,” the attraction to a worldview that things are normal and will remain normal, despite considerable evidence to the contrary. People refer to Guitar Center as “too big to fail,” despite the fact that the firm shares absolutely no characteristics with companies that normally acquire that moniker, such as Citibank, ExxonMobil, or General Electric. They assume that another buyer will emerge to make a simple change of ownership behind the scenes without considering the financial complexities that make such a transaction nearly impossible. Most often, stakeholders in the musical instrument industry assume that the mechanics behind Guitar Center are more complex than they can easily grasp, and so they simple ignore the matter despite its potential impact. As a result, when I visited the NAMM Show in Anaheim, California only days ago, I found that the overwhelming majority of industry figures with whom I spoke spent very little time or energy on the critical analysis of a firm which represents 28% of the industry, a total $2.1 billion out of $7 billion. As a result, we can assume that few people will have contingency plans for potentially disruptive scenarios resulting from Guitar Center’s fate, but that is hardly unprecedented in the history of business. Reality does not need our permission to have its way with our destiny.

Moreover, the media which covers the musical instrument industry is deeply uncritical. Nearly everything I have read regarding the current situation has been either a regurgitation of corporate press releases or a subjective analysis riddled with factual errors and shallow knowledge of business in general and finance in particular. I am told that the tight budgets and intimate nature of the industry make some publishers afraid to engage with controversial subjects that might jeopardize a customer relationship. Either way, many industry professionals are basing their assessment of the market on dangerously incomplete information.

I am not going to provide a long-hand analysis of Guitar Center’s capital structure and every gruesome event in the company’s recent history; if you are so inclined, you may review my past work and browse Google.

A quick summary tells the tale of how close we are to the end, but first we should revisit the beginning. Guitar Center grew with the help of private equity firm Weston Presidio to become a national competitor and, eventually, a publicly-traded company. With the leadership of Marty Albertson, Larry Thomas, and others, the company continued to grow and prosper as a public company until leaders enlisted the help of Bain Capital to take the company private through massive leverage just prior to the largest financial crisis in a century. As you consider any of the other events associated with the present, this Original Sin of the past is the very root of the problem.

Private equity firms like Bain take mid-sized companies and pump them full of debt with the express intent of making them industry-dominating competitors, selling them to the stock market as a candidate for massive growth, and cashing in. To make this possible, private equity’s stake in the company is usually represented by “payment in kind” (PIK) notes, a type of bond that pays crushing interest – in this case 14.09% – but requires no cash outlay until the bond’s maturity. So that 14.09% is accruing, but it isn’t due for years, ideally after the company has been sold to what is often charmingly referred to as “the dumb money,” the retail investors who buy a stock without knowing the company’s true financial position. Before any of the company’s real problems are revealed, the private equity firm receives its payback in the form of stock, since PIK notes can be paid back in any medium of exchange. If all goes to plan, the stock price shoots up after the IPO and the PE firm makes a tidy profit – all in about three to five years.

Bain made two critical mistakes from which it cannot recover. First, it attempted to run this playbook on a company that had just done this very thing with Weston Presidio five years prior. Second, it did so just as the housing fraud and financial insanity which characterized the late 1990s and early 2000s nearly destroyed the U.S. dollar and left us with martial law. Every business maneuver that follows this initial error is too little, too late. Compound interest on debt is the strongest force in the universe, and retail has changed too much for any predictable corporate management technique to have a noticeable effect. The rest of this story is details.

To explain how close the company is to collapse, consider the following timeline:

December 2013: My blog post “Guitar Center and the End of Big Box Retail” goes unexpectedly viral just as GC management is negotiating with its creditors to deal with the fact that it does not expect to be able to honor its financial covenants in the near-term. In response, management claims that the firm is stronger than ever, that every single store is profitable, and that the $1.6 billion in debt with short-term liabilities of over $1 billion is manageable. The company has $25 million in cash going into the Christmas season. The Securities and Exchange Commission begins to investigate irregularities in how GC considers the interest on its bonds to be outside of expenses that would impact EBITDA.

March 2014: The company reaches an agreement with its largest bondholder, Ares Management, to exchange the latter’s PIK notes for equity. $401.8 million in PIK notes are retired in exchange for holding company preferred stock. In a statement by Standard & Poors, the agency expects to lower the corporate credit rating to “SD” which is “selective default” and considered tantamount to bankruptcy because it is a “distressed exchange” in which investors receive less than what they are promised.

April 2014: Bain and Ares offer the bond markets two new bonds to pay back existing bondholders, a $615 million offering of Senior Secured notes with a coupon of 6.5% maturing in 2019, and a $325 million offering of Senior Unsecured notes with a coupon of 9.625% maturing in 2020. These securities are purchased by institutional investors such as LeggMason, GoldmanSachs, and Prudential for their high-yield income funds which go to round out the assets of pension funds, ETFs and other, more conservative portfolios. They produce less than $50 million in free capital for Guitar Center and will still require an all-in coupon payment of around $35 million every six months. Guitar Center press officers attempt to portray this as a dramatic improvement of its financial situation in what is probably the best possible example of the Yiddish word “chutzpah.” Moody’s and Standard & Poors assess the company’s family rating as subprime and its unsecured bonds as junk, with outlook negative. Bond covenant analyses note that the restructuring will only produce enough free cash to pay for the interest on these instruments- there would still be little chance that the company could make strategic moves in the industry. This view assumes that business condition will remain the same or improve. If they get worse, all bets are off.

August 2014: Guitar Center secures a lease in the most expense real estate on earth – Times Square, Midtown Manhattan, New York. CFO Tim Martin claims that not only will this not be a drain on finances, they would make “a lot of money.” He also announces that then-CEO Mike Pratt’s “2020 Vision” was to achieve $3 billion in revenue in just five years – a 20% year-over-year growth in a slow-growing industry. The Times Square Guitar Center debut was accompanied by a 36-second video from the grand opening described as “a new gateway to hell,” featuring fifteen metal guitarists and three drummers playing nonsense simultaneously. It received 500,000 views in the first 48 hours.

 

Guitar Center bonds

November 2014: Guitar Center is forced to admit to bondholders that despite its promises to thrive from its new capital structure, its EBIDTA has slipped 35%, same store sales are down, and total revenue is flat. Secondary debt markets double the yield on its bonds overnight. Investors who committed to the bond months before are willing to take a 10-35% loss in a few short weeks rather than commit to the company’s future. CEO Mike Pratt resigns and is replaced by Darrell Webb, a retired executive whose most recent experience is as CEO of JoAnn Fabrics and the Sports Authority, two companies that also answer to private equity.

December 2014: Guitar Center fires Gene Joly, longtime executive and current president of the Musician’s Friend unit, two days before Christmas.

January 2015: Citing a bloated cost structure that keeps the company from achieving historical profitability, new CEO Darrell Webb fires 42 corporate executives, including the last remnant of Mike Pratt’s team, as well as 28 regional managers. Music Trades reports that the company is down to $10 million in available cash after Christmas.

The constant, smarmy mantra of impenetrability and infallibility has finally been dispelled. Their new executives have, at long last, ceased the comedy routine about how Guitar Center’s stores are always profitable no matter how many times Standard & Poor’s declares them technically in default, or that a billion dollar of debt is totally normal and wonderful and manageable. In a recent email, Webb explains the firings with the dry rationale of needing to be profitable, and foreshadowed that the company will “continue to seek efficiencies.” We seem to be hearing much less about that $3 billion in future revenue and much more about the jobs yet to be cut.

After all the noise, we are entering the final phase.

This is the end, my friends

Nobody can manage this situation, much less lead the organization out of chaos. All reports indicate that Darrell Webb is not there to save a thing – he reportedly has less knowledge of the music business than the Canadian who was just warming his chair. You would think that if Ares Management was serious about saving this company, they would choose a younger, more innovative executive able to lead Guitar Center into a disruptive future, but instead they hired a man who wouldn’t know a Marshall Plexi from a nuclear submarine. I submit that Webb is the perfect choice for his likely mission: to lead the company into an orderly bankruptcy. Should the company achieve Chapter 11 reorganization instead of the final, fatal Chapter 7 liquidation, it must be on good terms with vendors and bondholders. They can lie to employees all they want, but accounts must be in order if there is to be value salvaged from this doomed structure. Thus, the new CEO has been chosen based on a cold-blooded ability to shuffle the books for private equity financiers, not for his ability to lead a musical instrument organization into a disruptive future.

I have already read analyses of Webb’s recruitment as a way for Ares to get somebody more capable of achieving “their” vision. This is a mass hallucination that stems from the old PR team’s attempt to recast the financial failure of 2014 as the addition of a smart, valuable partner with expertise in retail based on that company’s recent takeover of Neiman Marcus alongside their partners, the Canada Pension Plan Investment Board. Commenters in the musical instrument industry seem to understand little about Ares Management, a very large, serious firm that has, since taking equity in Guitar Center, gone public and engaged in a strategy that would put it more in the category of the JP MorganChases and GoldmanSachs of the world. There has not been a single public comment from an Ares employee since 2014 about the future vision for Guitar Center and I suspect that one does not exist. Go look through Ares’ quarterly reports and press releases and search for the word “guitar.” Perhaps that will provide a perspective on the relative importance of this transaction to a company with a much larger financial play in the works.

This is pure speculation, but given the size of their investment I imagine they see Guitar Center as a deal they made back in the mid-2000s before the crisis, one that Bain screwed up. They probably took the equity as the best way to perhaps get something instead of pennies on the dollar. These days, they’re more busy reopening factories in Europe along with national partners. They have better things to worry about than this sad scene, but this is a conclusion that will be very uncomfortable for members of the musical instrument industry who will not want to feel quite so unimportant.

The fact is, the die is cast. In a couple of weeks, Guitar Center will need to report its Christmas performance to its bondholders. If things do not look good, its bonds will be ripped apart like Radio Shack’s. Moreover, if I had to guess, the $10 million in Guitar Center’s coffers will not be enough to make the payment to their bondholders due in April 2015. In advance of that, they will need to seek protection under Chapter 11 of the bankruptcy code. Maybe they have another ultra-complex trick to bring out of the private equity playbook, but this whole thing is a waste of time. None of this sells guitars or inspires kids to be better musicians in a world where laptops play the tunes. We’re all analyzing the most mundane details of the terminal symptoms of this sickness that has seized American business culture in the past twenty years. Perhaps we need to heal that disease before we can back to fun things such as playing guitar and running profitable companies.

Here’s what this really means: it’s the end of big box retail, an irrational addiction to growth, and the scourge of unregulated structured finance. For a few years, unwise urban planning and unregulated banks created a new bubble in the American suburbs. People bought homes they could not afford and turned their houses into lines of credit. This swindle eventually brought the economy to its knees and has taken most a decade to regain some state of uneasy equilibrium. Still, it was particularly stimulating to a certain type of retail that also depended on constant growth and financial trickery. The objective truth is that the growth of the last decade was financed by banking fraud, and that financial trickery of this sort only fools people in the short-term. Eventually, you must have a product people demand, sold by competent people who care about the business, financed in a way that makes sense.

This unforgiving reality will work great for local stores and entrepreneurs with a classic, cautious approach to business management. For a while, suspending our disbelief in reality allowed standard-issue corporate financiers to run a pump-and-dump scheme on all kinds of retail, selling risky ventures to “dumb money” and reaping the rewards for a select few. We are all wiser now, and the market conditions simply will not support that behavior.

This is not a moral judgment, merely an assessment of market engineering. Small and smart will carry the future while big, dumb, complex, and dishonest will bite the dust.

These conclusions were my instincts before I conducted research into the example of Guitar Center. I was reasonably sure then, and I am entirely convinced now. The only remaining question is where the industry will go from here. Go ask the good people at Behringer for a preview. Representatives from their company have informed me that since they parted ways with Guitar Center they discovered a network of smaller, more focused retailers who were more than excited to form a stronger relationship with their company, and in turn delight customers even more. This resulted in the company’s greatest annual revenue in history, both in the United States and throughout the world. Behringer seems to think that a world without a single, corporate, banker-driven industry hegemon is not only possible, it’s preferable.

That’s a bright future, if you choose to share that vision. But whether you believe in it or not, this scenario is unavoidable. Guitar Center is finished. Now the musical instrument industry can get back to business.

 

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Thu, 02/05/2015 - 21:22 | 5750052 knukles
knukles's picture

Like Yoko Ono's singing

Thu, 02/05/2015 - 21:29 | 5750079 El Vaquero
El Vaquero's picture

Yoko Ono's singing? AYAYAYAYAYAYAYAYAYAYAYAY!

Thu, 02/05/2015 - 21:57 | 5750181 NoDebt
NoDebt's picture

Big-box musical instrument shops (Guitar Center):  not doing so good.

Big-box gun shops (Cabellas, et al):  very healthy.  Also applies to medium box gun shops, small box gun shops and no box gun shops.

 

Thu, 02/05/2015 - 21:59 | 5750188 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

LOL..don't worry operation chokepoint will take care of that thriving business, another Obama executive order victory. He builds a business and then destroys it for the greater good.

Thu, 02/05/2015 - 22:06 | 5750216 El Vaquero
El Vaquero's picture

Obama didn't build that business.

Thu, 02/05/2015 - 22:09 | 5750222 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

He didn't build it no, he's never built shit...but he has helped sales

Thu, 02/05/2015 - 22:18 | 5750236 El Vaquero
El Vaquero's picture

Yup.  Ruger, Colt, Springfield, Bushmaster, Glock, Remington, Sig Sauer, HK, etc... should all be sending him big thank you letters for bolstering their sales.  

Thu, 02/05/2015 - 22:19 | 5750248 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

I love my P938 for CCL

Fri, 02/06/2015 - 02:37 | 5750833 The9thDoctor
The9thDoctor's picture

Guitar Center is dead because kids these days don't play guitars. They have a GarageBand app on their computers and they make techno and dubstep songs.

http://youtu.be/3qblD8Ej32M

Fri, 02/06/2015 - 09:23 | 5751182 Alfred
Alfred's picture

Wait... don't close yet, I need strings.

Thu, 02/05/2015 - 21:30 | 5750081 Soul Glow
Soul Glow's picture

I didn't know she could sing.

Thu, 02/05/2015 - 21:30 | 5750082 Ignatius
Ignatius's picture

Zing...

Out of respect for John's talent I tried, I really tried to listen, but after 5 minutes....

Thu, 02/05/2015 - 21:37 | 5750106 RacerX
Thu, 02/05/2015 - 21:50 | 5750151 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

Sarc hat off....The last big box store to meet it's demise = IKEA. So many brain-dead, gay, liberal city dwellers who have an insatiable lust for modestly priced modern furniture that falls apart quickly.  A great business model. If you see stories about bad IKEA sales, you know there's a major problem.

Thu, 02/05/2015 - 22:57 | 5750350 swmnguy
swmnguy's picture

You can make IKEA's solid-wood furniture work.  But it's damn hard to get more than a year out of the particle-board crap with the fasteners made of pot-metal.  And when you look at all the other cheap furniture options out there, yeah; if they run into trouble we're in a world of hurt.

Fri, 02/06/2015 - 00:32 | 5750634 TruthInSunshine
TruthInSunshine's picture

Probably 95% of IKEA furniture is MDS.

But we're living in an MDS world, so...

Radiohead has a song about this - Fake Plastic Trees.

"Fake Plastic Trees"

Her green plastic watering can
For her fake Chinese rubber plant
In the fake plastic earth
That she bought from a rubber man
In a town full of rubber plans
To get rid of itself

It wears her out, it wears her out
It wears her out, it wears her out

She lives with a broken man
A cracked polystyrene man
Who just crumbles and burns
He used to do surgery
For girls in the eighties
But gravity always wins

It wears him out, it wears him out
It wears him out, it wears him out

She looks like the real thing
She tastes like the real thing
My fake plastic love
But I can't help the feeling
I could blow through the ceiling
If I just turn and run

It wears me out, it wears me out
It wears me out, it wears me out

If I could be who you wanted
If I could be who you wanted all the time

Fri, 02/06/2015 - 05:05 | 5750944 algol_dog
algol_dog's picture

This article is a perfect representation of every dam place I've worked for since leaving a my last private ma & pop shop I worked for in 1999 (we were bought out by a private equity group). It's everything that's wrong with this Country, ala Blackstone and their ilk. They have destroyed, of what little remains of middle america, over the last 20 years. They are an insidious disease upon the nation. They all need to be eradicated.

Thu, 02/05/2015 - 21:28 | 5750069 livefreediefree
livefreediefree's picture

Yea, homes as ATMs produced a bubble. Which will pop soon.

So, Obama is the Progressive Reagan. NP. If true, however, when this whole shit mountain that is the US economy craps out, the Republican President elected in 2017 to resolve this problem will become the conservative FDR. And, wonderfully, Obama will no longer be known as the Progessive Reagan, but the Progrressive LBJ, Nixon, Ford, and Carter; iow, four failed Presidents in one.

Fri, 02/06/2015 - 02:42 | 5750840 The9thDoctor
The9thDoctor's picture

You watch way too much Glenn Beck.

Thu, 02/05/2015 - 21:29 | 5750078 Soul Glow
Soul Glow's picture

Wallmart's next.

Thu, 02/05/2015 - 21:44 | 5750132 A Lunatic
A Lunatic's picture

Not likely. FSA needs to eat. But then again, I can hear, without too much effort, a 1%er off in the distance saying "let them eat guitars"...........

Thu, 02/05/2015 - 22:08 | 5750221 Osmium
Osmium's picture

iPads taste much better.

Thu, 02/05/2015 - 21:31 | 5750085 SilverFish
SilverFish's picture

Radio Shack and Guitar Center should join forces.....

 

 

Call it Radio Center, or Guitar Shack. I don't care...... let them fight over that.

Fri, 02/06/2015 - 00:01 | 5750553 delacroix
delacroix's picture

like k-mart and sears?

Thu, 02/05/2015 - 21:34 | 5750094 eyesofpelosi
eyesofpelosi's picture

Romney was a part of Bain if IT remeber correctly. Huh, that's interesting.

Thu, 02/05/2015 - 21:48 | 5750145 r00t61
r00t61's picture

Romney, heading Bain, pretty much single-handedly destroyed KB Toys, among many others.

Thu, 02/05/2015 - 22:01 | 5750201 STP
STP's picture

I was thinking the same thing, when I saw the name.  Mitt had his mitts all over the tits on this one.

Fri, 02/06/2015 - 10:26 | 5751502 BlindMonkey
BlindMonkey's picture

Gasp!!! Mitt wasn't trying to help the 99%?

(Where did I put my shocked face. I thought it was in the corner over here somewhere. Damn it...)

Fri, 02/06/2015 - 01:35 | 5750740 neidermeyer
neidermeyer's picture

Bain is a LDS leader surname ,, there is a Bain st in Nauvoo , IL. .....

 

I was in a guitar center just before Chrismas and they had a large unsold quantity of entry level guitars unsold. They had  some excellent prices on Electro-Voice speakers however....

Thu, 02/05/2015 - 21:38 | 5750111 44MagnumPrepper
44MagnumPrepper's picture

Those expansive spreads of shopping and resturants?  They are the new malls.  First every town had to have one and now nobody visits them.  In 30 years those lots will be cracked and the buildings will be empty.  Just like the soul of America.  But don't worry, the next big thing is around the corner... maybe.  If this scenario doesn't end it all.

Thu, 02/05/2015 - 21:54 | 5750170 Divine Wind
Divine Wind's picture

 

 

 

Some will survive.

Pharmacies, barber shops, 'Licka stows' and Jimmy John Sub Shops will need to be somewhere.

 

 

.

Fri, 02/06/2015 - 11:30 | 5751829 newdoobie
newdoobie's picture

Mmmmm Jimmy Johns

Thu, 02/05/2015 - 22:26 | 5750261 ucde
ucde's picture

Some percentage of these shops and fast food chains were not even really breaking even to begin with. Catherine Austin-Fitz in this article [ http://www.ratical.org/co-globalize/narcoDollars.html ] makes a case for the fact that many of our local retail and fast food establishments are just fronts for money laundering. 

Basically, go to a place that seems to always be open, but with nobody there. A place that services 3 to 10 customers a day for less than $20 a pop each. Pay attention when you drive by how many people are there. If the business isn't bustling, but remains in spite of that, its likely they are acting as a front for off-the-books cash flows. Apparently a lot of our big chain stores and fast food restaurants serve this purpose. Breaking Bad was not so far off -- both in the choice of a fast food joint, and in the choice of a car wash, as both these places are apparently often used as fronts. 

Kind of makes you see that strip-mall sprawl in a different light, hey?

Thu, 02/05/2015 - 23:59 | 5750541 silentsock
silentsock's picture

Thanks for posting that link.

Quite interesting!

Fri, 02/06/2015 - 01:00 | 5750688 Steal Your Face
Steal Your Face's picture

Yes, thanks.

Fri, 02/06/2015 - 02:45 | 5750846 The9thDoctor
The9thDoctor's picture

If the business isn't bustling, but remains in spite of that, its likely they are acting as a front for off-the-books cash flows.

This is why I believe Sears is still around.  Sears should have gone out of business in the year 2000.

Fri, 02/06/2015 - 14:40 | 5752510 silentsock
silentsock's picture

It really opened my eyes.

I've seen a few local restaurants that have almost no one there every time you drive by, and this is during what you'd expect to be 'prime time' for a restaurant. (lunch/evenings and weekends)

I even remember saying to my wife about some of them:  "I wonder how they stay in business, no one is ever there. They HAVE to be making a profit though, because they've been open for years."

This article could explain a lot! As a matter of fact, we also have several car washes that are all filthy and terribly broken down, and you NEVER see anyone using them, yet they have been open for many years. (you car would be more dirty AFTER going through one of these places than it was before you went in)

Eye opening indeed!

Fri, 02/06/2015 - 01:01 | 5750691 McMolotov
McMolotov's picture

Living in the sprawl
Dead shopping malls rise like mountains beyond mountains
And there's no end in sight
I need the darkness, someone please cut the lights

https://www.youtube.com/watch?v=rH_7_XRfTMs

Fri, 02/06/2015 - 07:57 | 5751078 Refuse-Resist
Refuse-Resist's picture

Empty retail spaces on Main St, and everywhere.  Empty mothballed factories.  All over this county.  It's happening already.

 

I looked at some google earth imagery of my area.  In 1993, all of these now-abandoned factories had parking lots full of cars. Clothing, textiles, and furniture manufacturing.

 

Looking at the image from 2000, those lots are 80% empty. Today they're all completely empty.

 

Where did all thsoe people who worked at those places end up? Jail, disability, or the moved away.

 

This is the wasteland. Rutherford County NC is your future.  I challenge anyone who doubts what I say to look at the google earth imagery for themselves.

 

IT's all there in black and white (1993 satellite photos vs today's high res color images.

Fri, 02/06/2015 - 09:28 | 5751198 Sandmann
Sandmann's picture

It proves that American Democracy is no constraint on Oligarchy.........George Carlin would be so proud of Americans as they tuck into supersized popcorn

Thu, 02/05/2015 - 21:43 | 5750129 SmackDaddy
SmackDaddy's picture

"let's lever this bitch up and pay some bonuses"

-The Board

Thu, 02/05/2015 - 21:48 | 5750149 Divine Wind
Divine Wind's picture

 

 

This story kinda depressed me..

For musicians and those in related recording arts, Guitar Center is a pretty amazing place.

The store local to me has an outstanding range of products at great prices and in-house expertise to back it all up.

It looks like a big shopping trip might be in order.

 

 

 

Thu, 02/05/2015 - 22:47 | 5750319 fifthclmn
fifthclmn's picture

Here in San Diego, we lost Guitar Trader just over a month ago, and now this.  

I've been in a couple of small local music stores that cater to orchestral/school instruments but they most likely will never fill the void of losing GT/GC.

 

Thu, 02/05/2015 - 23:01 | 5750368 cynicalskeptic
cynicalskeptic's picture

The one here in lower Westchester closed a while back.  Pretty affluent community.  But then you're seeing lots of other empty stores in these expensive to live in villages.  

We're in the 1937 downturn that followed the 1929 crash.   

Cue WWIII soon.

Fri, 02/06/2015 - 00:14 | 5750583 Yes_Questions
Yes_Questions's picture

 

 

indeed. 

 

 

Fri, 02/06/2015 - 02:14 | 5750795 ThroxxOfVron
ThroxxOfVron's picture

"WWIII soon. "

Cue the band.

Fri, 02/06/2015 - 10:35 | 5751542 BlindMonkey
BlindMonkey's picture

Ok. Here's a crazy thought. I wish WW3 would be fought as a guitar solo, devil went down to Georgia style, rather than D5 tridents.

Yeah. I am a bit of a wistful loon like that...

Fri, 02/06/2015 - 07:59 | 5751081 Refuse-Resist
Refuse-Resist's picture

The music store in this town went out of business in 2008. 3 other entrepenuers tried to open business in that space on Main ST. They all failed. The building sits empty to this day with a for rent sign in the window.

Fri, 02/06/2015 - 00:17 | 5750555 Volkodav
Volkodav's picture

too many damn punk kids....

https://www.youtube.com/watch?v=0X69rIzFQDY

forget that mall crap...

Unknown Hinson Little Wing:

https://www.youtube.com/watch?v=DwHfu0MeMRs

Thu, 02/05/2015 - 21:54 | 5750169 Borrow Owl
Borrow Owl's picture

Gaddamn.

I guess this means an end to such classic performances as this .

Bummer.

 

Thu, 02/05/2015 - 22:04 | 5750208 disabledvet
disabledvet's picture

The last hold out from iTunes.

 

Screw you Apple! Rock until you drop!

Thu, 02/05/2015 - 21:56 | 5750177 silentsock
silentsock's picture

This is basically the 'Best Buy' of music stores. When it comes to areas of specialty such as music, large corporations aren't capable of running something like that, for very long. Only long enough to put all of the small local shops out of business while they break even, or even lose money to kill the competition.

After the local shops and the competition are gone, they increase prices, hire clueless/crap employees for near minimum wage, and the service along with everything else goes to hell. It allows them to beat expectations for several quarters, inflating their share price, while the execs and other people at the top pocket their millions, then they sell, bail, and sit on a beach for the rest of their lives while others pick up what's left of it....  (the new American business model)

There are some things large corporations just can't do very well. Music stores is one of them. Gun shops would be another.

Thu, 02/05/2015 - 22:26 | 5750263 Colonel Walter ...
Colonel Walter E Kurtz's picture

Hear, hear.

Wall Streeters and Private Equity Firms ruining everything slowly but surely...and then all at once.

Thu, 02/05/2015 - 22:26 | 5750264 Captain Willard
Captain Willard's picture

Is Guitar Center a bad business or a decent business with a bad capital structure?

 

Thu, 02/05/2015 - 23:50 | 5750526 The Darwin Mode
The Darwin Mode's picture

How 'bout a bad business with a bad capital structure.

Fri, 02/06/2015 - 00:20 | 5750595 Volkodav
Volkodav's picture

something like that...never a quitar shop in real

Thu, 02/05/2015 - 23:27 | 5750463 Ms. Erable
Ms. Erable's picture

Yup. I remember shopping at GC when they had locations only in Hollywood and Santa Ana; good to great deals, and usually could find exactly what you wanted (even the hard-to-find and/or obscure stuff). They went to shit when they went public - hard-tagged everything, dumped all but the 'top sellers' in each department (which, strangely enough, included their proprietary lines that were complete shit), and fired everyone that knew anything about what they were selling. I think I've purchased 2 or 3 things from them in the last 20 years (compressors and a tube preamp, IIRC), and nothing in the last 10.

They won't be missed.

Fri, 02/06/2015 - 02:24 | 5750817 ThroxxOfVron
ThroxxOfVron's picture

"This is basically the 'Best Buy' of music stores. When it comes to areas of specialty such as music, large corporations aren't capable of running something like that, for very long. Only long enough to put all of the small local shops out of business while they break even, or even lose money to kill the competition.

After the local shops and the competition are gone, they increase prices, hire clueless/crap employees for near minimum wage, and the service along with everything else goes to hell. It allows them to beat expectations for several quarters, inflating their share price, while the execs and other people at the top pocket their millions, then they sell, bail, and sit on a beach for the rest of their lives while others pick up what's left of it....  (the new American business model) "

 

True dat.

LOL.   I never saw so much theft, druggery, unearned ego and incompetence in one place until I walked into a Tower Records store...

 

 

Fri, 02/06/2015 - 11:31 | 5751830 Clycntct
Clycntct's picture

"There are some things large corporations just can't do very well. Music stores is one of them. Gun shops would be another"

The adjustment that needs to be made is in your attitude. You lay it out there but come to the wrong conclusion.

The large corporations performed as needed.

For the .01%

Thu, 02/05/2015 - 21:57 | 5750184 MountainMan
MountainMan's picture

How are you expected to work in a fucking noise factory like this?

Thu, 02/05/2015 - 22:18 | 5750245 acetinker
acetinker's picture

Two things;
Musicians are among the most aware on the planet.
Guitar Center treats its' customers like criminals.
Your article was way too long, and still failed to describe what is patently obvious to anyone who ever dared breach their doors; It's a Music Mafia.

OK, that's three things.

Other than that the demise of Guitar Center makes me sad- NOT!

Thu, 02/05/2015 - 23:21 | 5750440 Oldwood
Oldwood's picture

Aware of what? Is this why so many do drugs...they can't handle their "awareness"?

Thu, 02/05/2015 - 23:42 | 5750502 acetinker
acetinker's picture

?  Why are you sniping?  You and I agree on many things- we're manufacturers.  You build high end furniture for them that are better than you.

I build refrigeration devices without which neither you, or your high end "customers" or their serfs, would survive tomorrow.

So, you can can take your high and mighty attitude and shove it straight up your ass, Oldwood.

I can be your best friend, or your worst enemy.  Your choice.

Thu, 02/05/2015 - 22:22 | 5750252 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Interesting how shopping centers and stores all over Asia are doing well, yet in USA they are all collapsing and the excuse is that EVERYONE is buying ONLINE!  All rubbish.  Even USA online retailers are having cyber sale after cyber sale.  Face it-the ship is sinking and no amount of white washing will change this fact. The very fact that Bloomberg and other sites have eliminated their reader's opinion pages is proof that the censorship is only  going to get tighter. 

Thu, 02/05/2015 - 22:30 | 5750276 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

Damn right. I did not know that bloomberg did that...

Fri, 02/06/2015 - 06:34 | 5750996 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Yes they did.  A year earlier WSJ made nearly all articles for subscribers only. Of course this did not bode well for many as that would mean that they could easily be found out by the government if they posted THE TRUTH.  Now Bloomberg has joined the fray.  You know that things are not good when this happens. So we know that China is also suffering as they are tightening the screws on what little web freedom they have.

Fri, 02/06/2015 - 06:34 | 5750997 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Yes they did.  A year earlier WSJ made nearly all articles for subscribers only. Of course this did not bode well for many as that would mean that they could easily be found out by the government if they posted THE TRUTH.  Now Bloomberg has joined the fray.  You know that things are not good when this happens. So we know that China is also suffering as they are tightening the screws on what little web freedom they have.

Fri, 02/06/2015 - 02:23 | 5750815 JuliaS
JuliaS's picture

Ever heard of Chinese ghost malls?

Fri, 02/06/2015 - 06:35 | 5751000 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Yes but Chinese government builds just to keep people employed.  That is why a lot of their economy is FAKE like USA.  But in the rest of Asia the malls are packed and they DON'T need 70% or more sales to pack the people in. 

Thu, 02/05/2015 - 22:22 | 5750253 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Interesting how shopping centers and stores all over Asia are doing well, yet in USA they are all collapsing and the excuse is that EVERYONE is buying ONLINE!  All rubbish.  Even USA online retailers are having cyber sale after cyber sale.  Face it-the ship is sinking and no amount of white washing will change this fact. The very fact that Bloomberg and other sites have eliminated their reader's opinion pages is proof that the censorship is only  going to get tighter. 

Thu, 02/05/2015 - 22:57 | 5750353 cynicalskeptic
cynicalskeptic's picture

Interesting how shopping centers and stores all over Asia are doing well, yet in USA they are all collapsing 

Hmm... and that has NOTHING to do with the fact that Asis is now making most of the stuff that we used to make in the US....   Those nations are actually CREATING WEALTH and ADDING VALUE so their workers have money to spend.  

The US isn't creating wealth anymore.  Here in the US the financial parasites are sucking the little wealth remaining out of the US economy.  The average worker either isn't working at all or doesn't have any disposable income to spend on anything beyond the necessities (and sometimes not enough for even those).

Thu, 02/05/2015 - 23:26 | 5750459 Oldwood
Oldwood's picture

But we are still "printing", trying to redistribute some of that wealth over here. Wouldn't it be great if we all could make a good living from sales commissions on the crap we import and consume? I mean if we could just get a little piece of everything right, without really having to work for it or do anything more than consume? It would be like creating the perpetual motion machine or, or , or cold fusion!

Fri, 02/06/2015 - 06:37 | 5751003 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Yes you are totally right. It is very frightening.  We felt that way when we lived in USA. Glad to have gotten out of there. 

Fri, 02/06/2015 - 06:37 | 5751004 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Yes you are totally right. It is very frightening.  We felt that way when we lived in USA. Glad to have gotten out of there. 

Thu, 02/05/2015 - 22:47 | 5750322 teslaberry
teslaberry's picture

it's remarkeable that this whole article does not mention the demise of music row in manhattan on 48th street. 

 

i used to go there all the time. and then a couple years ago ALL THE DIFFERENT STORES CLOSED ALL AT ONCE. 

http://forgotten-ny.com/2014/06/music-row-west-48th-street/

end of an era.

 

AND COLONY RECORDS CLOSED TOO! . famous colony on broadyway and 50th or 51st. 

and the music sheet and music book place on 3rd avenue just below astro place closed ( forgot the name) it's now a massive gym. it was an institution. i think it was called 'carl ...." i forgot though. 

 

 

this was a long time in the making. 

 

 

 

Thu, 02/05/2015 - 23:33 | 5750480 Oldwood
Oldwood's picture

music is a discretionary expense that can be cut from the budget. Also, making music, as with any other endeavor requires effort and motivation, something currently in short supply.

Fri, 02/06/2015 - 02:41 | 5750827 ThroxxOfVron
ThroxxOfVron's picture

iPod DJ'ing killed what was left of the turntable scene.

For a moment CD devices looked like they had a chance to re-create some of that magic; but, club owners care more about pocketing another $200 a night than having a competent turntablist work their craft and build following.  

I've seen assholes with fancy rigs that are designed to look like turntables and a mixer walk away to get drunk/coked while a laptop shuffles their 'set'.   Rampant rapper mugging douchery over heisted classic r&b cuts is not really helping matters...

 

IF the deflation is really allowed to purge the property market the weirdos and kids will come in an boost signal and everything will blossom again: garage, punk, basement jams, jazz improve.  Not just music: theater, dance, painting, etc...

I have been saying for a while that the financial oppression has been sustained for too long for organic flow to resume.  We are losing a generation of would be content creators as the natureal tendency for art schenes/movements to weed in the cracks is being inhibited and culture smothered by with-holding the access to cheap/raw space.

Fri, 02/06/2015 - 08:09 | 5751089 homme
homme's picture

Youtube sure cut the hell outta that learning curve.

 

Fri, 02/06/2015 - 06:38 | 5751006 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

When we lived in NJ my husband used to LOVE going to that store. He will be sad to hear of its demise. 

Fri, 02/06/2015 - 06:38 | 5751007 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

When we lived in NJ my husband used to LOVE going to that store. He will be sad to hear of its demise. 

Thu, 02/05/2015 - 22:50 | 5750330 fishwharf
fishwharf's picture

I for one will not shed a tear over Guitar Center's demise.  I've given them plenty of my hard earned cash over the years, and if there is a liquidation sale at the local GC I'll be there, but they're the Walmart of musical equipment stores.  An untold number of Mom & Pop music stores have gone out of business, unable to compete with GC's economy of scale.  Fortunately there are a fair number of good guitar stores left that will get all of my business now and benefit from GC's misfortune.

Fri, 02/06/2015 - 00:05 | 5750559 williambanzai7
williambanzai7's picture

I never understood how they could survive in an environment where DJ mixing seems to be more popular than actually learning how to play an instrument.

Fri, 02/06/2015 - 01:35 | 5750739 Ralph Spoilsport
Ralph Spoilsport's picture

A good friend of mine has a small guitar shop in Newark, DE that is popular with area working bands because the owner, Dennis Swift, is so knowledgeable about anything to do with guitars and amps. In nice weather, friends and customers hang out on the porch and catch up on whats going on. Dennis puts guitars out on the front lawn which has made the place a local landmark. He's seen a lot of bigger outfits come and go but he's still there helping musicians out.

http://www.crossroadsguitarhouse.com/

https://www.youtube.com/watch?v=hU-r7Iiylb4#t=76

 

Fri, 02/06/2015 - 02:00 | 5750773 Jr. Mintz
Jr. Mintz's picture

Looks like a place where musicians would feel right at home. Isn't the Sin City band from that area? The Shredded Field Mice also if I remember correctly.

Fri, 02/06/2015 - 09:29 | 5750357 Sandmann
Sandmann's picture

Watch Bain Capital destroy Canada Goose by turning it into a fashion label. Lower quality garments are already evident in Europe with people wearing jackets that would have them streaming in sweat if they were real heavy duty Canadian-weather inspired garments

Thu, 02/05/2015 - 23:10 | 5750404 mijev
mijev's picture

I have to admit I have a big soft spot for the GC stores. Great way to kill a couple of hours and the only time I really induige in window shopping and walk out with just a set of strings. I remember buying three cheap guitars in one of the Bay Area stores and chatted with the salesman for 30 minutes. Two years later I was in town and went back to that store. Same salesman and he still remembered my name.

Thu, 02/05/2015 - 23:32 | 5750464 The Darwin Mode
The Darwin Mode's picture

I bought a custom drumset from a tiny local shop in the late 90s, shortly after which the place was put out of business by Guitar Center. The salesperson from that soon-to-be-doomed establishment was a professional drummer who advised me on the construction of my set, was there for me every step of the way while the thing was being built, and shared tons of ideas and stories about getting the most out of drumming... and out of life, naturally. He was a fantastic musician, a tasteful collaborator, and was so dialed into the customer's perspective he couldn't help but be a terrific salesperson. When he accidentally scratched one of the new shells while mounting a piece of hardware, he was visibly sick about it and gave me the option of having a replacement drum built at his expense or getting free drum cases for the entire set -- worth hundreds in value.

...And now the big-box stores and online dealers are all that are left. Try asking one of these callow, pock-faced, apathetic ignoramuses working there anything meaningful about drumset and the kid is best just reading off the slick new product brochures on his countertop, or listing artist recommendations from a faves list more suitable to the ill-educated and musically unenlightened. No sense getting out over his skis. What a waste. If i get anything from GC, it's at most a set of sticks or a pack of guitar strings. I try not to spend more than 10 bucks there in any given month -- f#@k 'em.

If Guitar Center is on the way out, hope is on the way in.

Thu, 02/05/2015 - 23:46 | 5750512 sidiji
sidiji's picture

why do you post this infantile crap analysis? whatcha want us to do? short raid the company?

Thu, 02/05/2015 - 23:56 | 5750537 Bobbyrib
Fri, 02/06/2015 - 00:03 | 5750547 redwater
redwater's picture

GC was great when they first came into our city. 

Local music stores here were either pricey, boutique stores. With quality product. And good, but impatient salesman.

Or there were the general music stores (think school instruments) with cheap Fenders and Epiphones in a corner. Like walking into a used car lot. Cheap guitars behind the counter and workers who look at you like you're gonna rob the place.

 

So I thought it was great when they came to town, as they have a liberal return policy.

You can pick up the guitars and plug in and not have to wait for the salesman to go get the key to the "amp room". Because they lock it to keep the grubby guitar players from entering without a chaperone.

The workers are usually clueless. But at least they are musicians. Most other places are seem like they are staffed by some dude who plays the organ at his church.

 

The new GC in my area doesn't check your bags when you leave anymore. So the whole prison lockdown feeling is eased.

 

 

Fri, 02/06/2015 - 00:04 | 5750557 FreeNewEnergy
FreeNewEnergy's picture

Couple of thoughts on this, though I am not a musician (I'm a lyricist), but have lots of friends who are, two of them in particular will be affected by this.

Armand Schaubroeck, and his brother, Duane, owners of the "Great, great" House of Guitars in Rochester, NY. A legendary music store. I grew up with those two, who still are in the store working a few days a week. It's enormous now, grew from a small storefront, eventually took over the Grange building and is still there, right down the street. I'm sure the Schaubroeck's will benefit from GC's demise, as in buying up excess inventory and regaining a lot of market share.

Henry Juszkiewicz, CEO and, basically, owner, of Gibson Guitars. I spent four years of high school with him. Generally an OK guy back in the late 60s, ended up at Harvard Bus. School, did an LBO to obtain Gibson, built it into a big deal, but I hear he's somewhat of a dick. Whatever. I give him credit for making big money, but I wouldn't want to be in the way of his temper when all those guitars on credit to GC come back damaged or don't come back at all. Tough for him. He'll lose a couple million. He has plenty more.

This article points out how PE firms strip out assets, but how about M&A, like the recent (today?) buyout of Office Depot (which had previously bought out OfficeMax) by Staples. That, in my view, is a monstrous story. ONE place for office supplies. That's it. 1984, just 30 years too late.

Thanks god McDonald's is on the rocks. If there will be one place for cheap burgers, I'd take BK or Wendy's over them any day, though I think the fast food business is beginning to crowd out them too. Lots of local or regional burger joints. I may open a sub shop myself. $8.95 is about average these days for a large sub. I'd need to sell about 20-30 a day at that price to make a living, I guess. WTF?

Every day, I read and hear the most absurd shit. When the fuck is it going to collapse? Soon, I hope, because I have cash and silver and food and I've become a great gardener and excel at lots of other "survivor" type skills. I'm fucking ready. Let's get this fucker over and done with so we can start rebuilding.

Fri, 02/06/2015 - 00:16 | 5750570 williambanzai7
williambanzai7's picture

It used to be that cheap gas fueled big box retail shopping. But now cheap gas seems to be fueling shipment to internet ordering. Everything seems to be purchased online now because the shipping cost is marginal.

The knowledgeable salesperson is another ghost you will never meet in a big box store. All that know how is now for free on the internet. 

Here's an idea though, Big Prepper's Survivlist Paradise big box retail store ;-)

Fri, 02/06/2015 - 07:47 | 5751063 Arnold
Arnold's picture

Or maybe 'The Job Shop'

The best positions your money and influence can buy!

"Here’s the graduating class of 2015. Congratulations guys, you finally made it!

Sen. Saxby Chambliss (R-Ga.)
Rep. Lee Terry (R-Neb.)
Rep. Jim Gerlach (R-Penn.)
Rep. Jim Matheson (D-Utah)
Rep. Jim Moran (D-Va.)
Rep. Bill Owens (D-N.Y.)
Sen. Mark Begich (D-AK)

Four Democrats and three Republicans. Unsurprisingly, selling out is a bi-partisan.........."

Wahooooooo................. first camping customers in the door.

Not a new idea, but a retail twist on the third oldest profession.

Fri, 02/06/2015 - 10:03 | 5751370 Smilygladhands
Smilygladhands's picture

Great Great House of Guitars brings back some memories. Growing up in fingerlakes area i remember these commercials well. And brother weeze on CMF. 

Anyway, this article explains my recent experiences with my local GC. Staff was coming across as uncaring and abrupt. 

Fri, 02/06/2015 - 00:34 | 5750639 Eahudimac
Eahudimac's picture

Wow. I've got to say, I am a bit shocked. I love guitar center. God knows I have spent some money in there. This just goes to show that the author of this article is exaclty right. You can only grow a business so much. The fed isn't going to create artificial demand for guitars. 

Interestingly enough, this may be a good thing for the small business owner. I bought my last bass from a local luthier. Yes, it was a bit pricier tham most basses in Guitar Center, but, the guy custom built it they way I wanted it and it is beautiful, sounds awesome and the craftmanship is exceptional. To me, it is priceless. I also have a Gibson Les Paul. Great guitar, but if I ever by another, I am going back to the guy that made my bass. Same with amps. There are many small amp companies in my state (NC) making great, high-quality amps. This may be a blessing for these guys. 

Fri, 02/06/2015 - 00:55 | 5750665 Volkodav
Volkodav's picture

Forget them damn malls..

real pickers will not miss...

Unknown Hinson  Voodoo Child

https://www.youtube.com/watch?v=Ir78vYpJ1Mg

Fri, 02/06/2015 - 19:13 | 5753645 Ralph Spoilsport
Ralph Spoilsport's picture

+1 for Unknown Hinson. A great guitar player and an insane onstage persona. His real name is Stuart Daniel Baker and he never breaks character. Here's a great example:

https://www.youtube.com/watch?v=NtSWuoVlR7o

Fri, 02/06/2015 - 00:59 | 5750684 kchrisc
kchrisc's picture

 

 

 

This is the end
Beautiful friend
This is the end
My only friend, the end

Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I'll never look into your eyes...again
...

The End, The Doors

The banksters need to repay us.

Fri, 02/06/2015 - 01:14 | 5750705 nah
nah's picture

I heart Guitar Center

Fri, 02/06/2015 - 02:18 | 5750800 Platypus
Platypus's picture

GC and other music stores like Samash etc, took off with the advent of the home studio mania. Well the mania now is gone. Add to that fierce online competition and the outcome is clear. Scot Stapp living in his car without money to eat is the perfect reflection of the DIY musicians movement which thrived in the end of the decade/century/millennium and now is gone.

Fri, 02/06/2015 - 10:24 | 5751492 Toolshed
Toolshed's picture

It would be funny were it not so sad. I talk to music sales guys regularly, both brick-and-mortar and on-line, and they are ALL acomplished musicians. They tell me about the famous bands they have toured with and their numerous gigs, yet they are all low paid musuc store monkeys. Thank god music is just a hobby for me, because only the very best of the best seem to be able to make any money at it.

Fri, 02/06/2015 - 03:01 | 5750862 NoPasaran
NoPasaran's picture

Noone plays guitars these days. Guitars are passe since at least a decade.

Fri, 02/06/2015 - 10:11 | 5751406 Toolshed
Toolshed's picture

You are obviously misinformed.

Fri, 02/06/2015 - 03:25 | 5750879 zebrasquid
zebrasquid's picture

GC is like Borders...people go there to kill time, fiddle around, put the item
back on the shelf and leave without buying anything. Maybe a pick, or a mic every 10 years.
Basically, a free playground.

Fri, 02/06/2015 - 04:37 | 5750923 zipit
zipit's picture

That or the Internet killed it.  Or it killed itself by failing to adapt.  Ah, fuck it, the system and its 0.01% elite killed it, but not after it extracted every ounce of blood from it and its employees.  I suppose the Vampire Squid got its vig, too.

Fri, 02/06/2015 - 06:37 | 5751005 Arnold
Arnold's picture

Best music store I have ever been in:

https://www.dickscountrystore.net/

Fri, 02/06/2015 - 07:48 | 5751065 Firewood
Firewood's picture

Merca dont need no damn guitars. It needs shovels to dig its freelunch fat ass out of the shit.

Fri, 02/06/2015 - 08:03 | 5751084 Refuse-Resist
Refuse-Resist's picture

We 'shovel ready jobbed' some folks.

Fri, 02/06/2015 - 09:30 | 5751206 Mike Honcho
Mike Honcho's picture

People refer to Guitar Center as “too big to fail,” - that term only applies when you own politicians and GC doesn't swing that big of a stick.

Fri, 02/06/2015 - 10:01 | 5751352 Rubbish
Rubbish's picture

In the last year we had 4 new leases of commercial units in 2 of the shopping centers I remove rubbish. This is middle class America centers in So. Cal.

1. Blood drawing facility (wtf not at a medical building? ok got cheaper rent I guess)

2. A $ store

3. A thrift store

4. A beauty salon

 

We is in trouble

 

Gold Bitchez.....I pick up pennies

Fri, 02/06/2015 - 10:08 | 5751388 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

This article would best be served alongside one of the previous articles on the rising vacancy rates in shopping malls. 

The reckless build-up of suburban sprawl during the past couple of decades is the root cause of this.  Residential housing took it on the chin the hardest in 2008-2009, but the commercial side fared better.  It was a longer, slower unwind and we're starting to see the effects.

Fri, 02/06/2015 - 10:18 | 5751463 Toolshed
Toolshed's picture

There are a number of musical instument stores in  my area, and while they all pretty much suck, Guitar Center is an absolute joke. It is a complete waste of time, and usually irritating, to visit that crap hole. They want top dollar for beat up guitars and don't know squat about their products. Mostly people go there to bang on display instuments and try to impress the other "shoppers" with their skills. Good riddance.

Fri, 02/06/2015 - 11:02 | 5751689 manich
manich's picture

I will miss their online used instrument database. I have bought a couple of used guitars from far away GC stores that were better deals than what i could find on eBay.

Fri, 02/06/2015 - 11:48 | 5751916 Gaffing_Nome
Gaffing_Nome's picture

Without music, life would be a mistake.

- Mr. Nietzsche

Said that guy.

GC did put the local stores down and yes, because of their size they are wal-mart fer sound-muz...buying power-of-quantity and retailer/manufacturering handshakes etc.

I became financially a-ok by nixing the university and engaging in the rock (and later soundtrack/post work). Part of the reason why I didn't fall into starving-artist S/Hann generational idiot-type? Never taking on a shit job (aka bad music). It's a curious phenomenon; it's subjective. Buuuuut
! The determinative upon which my refusal of "bad job" was based on:

1. Would this job result in a crappier (music/arts) world?
2. Would the job make the world .00000001% better?

examples of a good job:

Help develop talents otherwise gone unseen, adding numbers to the burger flipping population

Soundtrack for the rare film which wasn't a hollywood piece of crap

Big one...discipline and the destruction of immediate gratification: getting to the point of being proficient with an instrument sucks a bit. I got into a minor tiff with an ex-vietnam vet sniper about this a few years ago. I was new to long range target shooting. Well, so new I'd never had the chance to try out the sport. He was a condescending LGS Owner, I was green as hell re: firearms. Aside from bad business, out of (seemingly no where) he raised his voice after I asked him a question about MOA vs MRADs:

"You GOTTA PRACTICE 3 HOURS A DAY FOR A YEAR TO (I forgot what he said here, was not familiar with the lingo)"

I'd spent my FRNs on that places' carry-class, bought 2 ridiculously overpriced firearms (carry and home defense)...was Outta place for him to raise his voice, obviously had some beef with my attitude?

I didn't want to exacerbate the situation and en-redden his face- he had gleaned a (most probably) a non-Crüe-cut, probably NPR-ish pot smoke something- wasn't wearing my camo-Tacticool that day.

Anyways...it takes a long time and a lot of head-hurt to do the music thing. 8-10 hours practice a day for 15 years to get good but there's no ceiling. Like any skill, some ppl are wired better then others. Still, I know many musicians who've been playing 8 hours a day for over half a century. That's not my deal, but it says something about discipline (my point).

(Sorry guise I always go way out when I haven't posted for a while, if u read this far. I salute you)

This is just "thought-experiment", but I wonder if ever there was (of course? But rare/pre-2007ish?)

A person /w a series 7 and a series 65 who (subjective, heh) "didn't take on crappy jobs" aka Do Genuine Fiduciaries Exist?

Gotta be some CFP/CPA types round here? Anecdotally, I've had 100% shit sandwich with FAs. Being that the ZH core goes by the "be ur own dang bank!" Mantra, maybe there's some ex-finance managers around who could bounce my query.

Big connection between why GC is dead and the advisor-consultant mindset I'm asking about. Interesting subject which hits close. GC, indeed was wal-mart, between tour dates, a GC was the refill-depot busted knobs, heads, strings, AC->DC warts etc. I wasn't aware of the hi-jinks that went on in the 2000s, thanks to the author for the info,

I've noticed this (applies to the shack too- universal "oops, we're in troubles" signs) at the GC past 1-2 years:

Went off commission, the employees

as another poster stated, no more bag check

a pronounced dearth of higher end equipment- in particular imports from the east ...$2500+ synths, Neumann mics, drum inventory (aside from the perfunctory 6000-7000$ Roland V drum set) went from higher end kits (real DW made outside La) to the Chinese versions (PHP I think)...lots of little hand-kinda hippy drums, like low end CP Crap. The fancy guitar room (the one with the thick doors+humidifiers and the one smaller room with the "do not handle/ask employee), well those rooms are gone in all 4 GCs here as of last fall...but before that, all the upper-end Martin/tTaylor acoustics (2000-20,000$) gone probably longer-then I think cause I hadn't been fer a while.

The few knowledgable employees=gone a while ago, most of these ppl have gone into genius-Apple bar like jobs, IT/Mesh-Grid installation.

Again, I went last November, they had a 1 day sale, 12 sets of decent strings for 20ish FRNs.

I was shocked I tell Ya, the place was gutted. The "fancy" woodwork removed, essentially the store/floor space had been "appropriated" into a ready for liquidation/new lease a'coming design. There were no longer sections. No longer a "keys dude" or guitar expert. Just a bunch of newly seasonal general-like workers who knew nothing about anything.

Same deal with the radio shack near me.

Used to love the shack...another poster mentioned the RC cars.

I too, could'nt afford the Tandy (1000?) but I did get the 200 in 1 electronic kit for some b-day of xmas.

Guitar Center was a scourge but I admits, I'm kinda sad about it for all the goofy time spent in the place.

O/T

These are definitely popcorn big-time days...

Anyone (no sarc) have a favorite kind of popcorn?

I can't do the kettle sweet corn stuff. I go old fashioned with the bag of seeds an shallow oil+salt.

Good day to ye all

Fri, 02/06/2015 - 15:15 | 5752647 Bemused Observer
Bemused Observer's picture

I can't mourn the death of a big store. All these guys handed everything over to Wall Street alchemists, and got exactly what they bargained for...
People will still want and play guitars...another poster said he had to buy from a local dealer, a bit pricier, but better quality. So, he'd probably have to give the purchase a bit more thought...and that's a good thing. People SHOULD give discretionary purchases some thought, instead of just reaching for the credit card for some cheap piece of crap.
The death of the big box stores does not mean the death of retail. Retail will continue, but hopefully the trend will be towards smaller, more local businesses. And hopefully, these new stores will resist when Wall Street comes calling again, trying to suck off their successes.

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