Guitar Center May Not Survive 2018

Guitar CenterOver the last couple of years I’ve outlined the struggles of Guitar Center, and to be frank, I’m surprised that the company is still around in its current form. That said, it appears to be on its last legs ever since its credit rating was lowered to a level that makes it almost impossible for the company to borrow or change the terms of its massive loans.

Standard & Poors now rates Guitar Center at CCC-, which equates to “Default imminent with little prospect for recovery.” It’s not the lowest rating level, but it’s clearly a shot in the heart to the company’s financial survival.

It’s almost inevitable that GC is going to change its form or even cease to exist sometime in the future. That actually might be better for the entire industry as a new stream of mom and pop retails fill the void, and we go back to the good old fashioned local music store again.

Check out the following short video that explains what’s happening.

Free Mixing Crash Course
terry

1 Treat people badly and rip them off blatantly
2 Mke purchases beyond your ability to carry long term debt
3 Sell on price, taking the profit out a business

SJ

I’m going to miss having noticably high employees call me “Dooood” and look confused when I ask a simple question. Pity, really.

Dan A.

Guitar Center actually has some profitable stores, but they also have a lot of break-even and negative revenue stores. Sadly, some of their smaller market stores are their better customer service stores (the store in Pueblo, Colorado comes to mind.)

The guitar buying public has always been their mainstay, but that’s a diminishing market throughout the US (less youth getting into it, abundance of good used instruments, etc.) Still, guitars, amps, and related accessories represent the bulk of their sales. They’ve done well with percussion and drums too and have remained consistent over the years.

But they’ve been all over the map with DJ and pro-sound, sometimes good, but usually lacking the technical expertise needed. Same with synths and electronic music gear. Some stores in rather large markets stock only midi controllers and no actual synths – an odd strategy in an expanding market.

As brick and mortars compete directly with online retailers, the last thing a customer wants to hear is, “we can order that for you.” Jeez, anyone can do that. It defeats the point of walking into the store.

They’ll likely file Chapter 11 and close about half of their stores. Hard to say what will become of them after that.

Brent

Guitar Center isn’t going anywhere anytime soon. They just purchased one of the top 50 AVLC integrators in the USA. The manufacturers cannot afford for GC to go out of business.

Breadwinner's Wife

If Guitar Center goes under, what do you think this will mean for Music & Arts, specifically their educational sales/rentals? I have a somewhat vested interest. Are they worth being scooped up by another corporation, or will they die with GC?

    Bobby Owsinski

    I think you’ll see smaller local music stores spring up to fill the void.

Stephen

I love to support local when I can and I’ve made a few purchases (reluctantly) from the two GCs here in St. Louis. But Sweetwater.com gets the mother load of my business–probably 95%+. They are smart and knowledgeable. No tax and free shipping. If something isn’t right they make it right … fast.

The Paul Steezo

Possibly one of the WORST PLACES TO TRY AND MAKE A LIVpireING. AFTER GC SODOMIZED THE SALES ASSHATS BY KILLING THEIR COMMISSION RATE AND UPPING THE HOURLY PAY… THEY REAMED THEM WITH NO LUBE!!! GLAD TO SEE DISTRICT MANAGERS AND STORE MANAGERS GET THE SHIT CAN TO SAVE MONEY….FUCK GUITAR CENTER

Greg

The one in Vegas has lots of crappy, cheap guitars within reach. Everything worth playing is too high on the walls to get them by yourself. Picking up a several dead classicals will not make anyone want to buy one. Wow me with tone on the first instrument I pick up. You’ve only got a moment to get my attention. People won’the ask for the good guitars to be pulled down after you wasted their time with three pieces of shit because they’re probably vomit also right? There are a lot of good yet cheap guitars out there. They don’t even need to have for sale the stuff for the lowest common denominator. They should be just slightly more selective.

Dan

This is not a big surprise, of course we are seeing it all over the place with retail. One thing that could possibly help any store that could be imaginative enough to figure out how to implement this, would be to create a place people want to hang out and beyond just talking about instruments or clothes or whatever the product is.

The one major thing online retail can’t really give people, is the kind of in person community experience so much of our culture is losing year after year.

But it takes creativity, and far more than say setting up a small Starbucks in your store, although that would be a good start!

Anyway, I think it’s human connection and a sense of community that people are really yearning for, and whatever retail experience begins to address that, may find that they are onto something worth investing in

Music Ben

Curious to know what they do for online sales. It seems like the successful businesses have transitioned to integrate a lot of their volume over the internet. Otherwise this is not a big surprise. We have seen the demise of some very large retailers in just the past few years. Target has closed plenty of stores, as has even the Walmart giant, and Toy R us seems to be having some challenges too. (And what are instruments if not toys for the big kids.)

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