FMIC's financial woes

[BigDaddyLH]

On the jazz forum, a thread about the new MIK Guild models turned to talking about Fender's financial woes: http://www.jazzguitar.be/forum/guita...p-revival.html

What do you think Fender needs to do to turn the ship around?

Does Fender make too many models? I just went onto their web site to count. They listed 116 Strat models (28 Squier/ 64 Fender/ 24 CS) and 94 Tele models (21/54/19). Too many?

[sir humphrey]

Yep - too many models, too much confusion in the brand.

[neocaster]

They've started manufacturing Fenders (not Squiers) in China. This will either save them or finish them off. I don't think it will dilute their brand to the point that somebody considering a U.S.-built Fender wouldn't buy a $1,200+ guitar, but (I've said this before) I find the fit and finish on Classic Vibe and Vintage Modified Squiers to be better than the Blacktop and Modern Player guitars.

[ataylor8287]

Originally Posted by BigDaddyLH

Does Fender make too many models? I just went onto their web site to count. They listed 116 Strat models (28 Squier/ 64 Fender/ 24 CS) and 94 Tele models (21/54/19). Too many?

There's definitely a ton. Could it be that Fender keeps expanding their line in an effort to minimize business lost to the partscaster industry?

[viking]

I dont give a jot about Fender.....they paid to use the shape and the name nothing more , nothing less.....Absolutely nothing to do with Fullerton or old Leo anyway. Why should I care anything about them......

[tele12]

Originally Posted by BigDaddyLH

.... Fender's financial woes......
What do you think Fender needs to do to turn the ship around?

Does Fender make too many models? I just went onto their web site to count. They listed 116 Strat models (28 Squier/ 64 Fender/ 24 CS) and 94 Tele models (21/54/19). Too many?

No they don't make too many models. Let's ask the question: which customer do you want, the guy who buys a guitar and plays it for 30 years....or the guy who likes all kinds of different models and buys new guitars amps every year?

The biggest problem facing them is they have a lot of debt because they bought too many failing brands at too high a price.

They need to really start thinking about offering better value to their customers instead of looking for better profit.

If you look at the models they have been introducing it is about lowest cost to them. Baja new colors.....Black and Sunburst, so you don't need to buy new paint. The new American Standard gets the pickups from the Baja.

I think they really need to decide what the "Fender" brand will mean. I don't see how you can sell $400 Made in China Fenders and $4000+ Custom Shop Fenders.

Dom Perrignon doesn't sell wine coolers in 7-11 and McDonalds doesn't sell aged Filet Mignons.

[Zillinois]

Way too many models IMO. I could go on for days...

There is also some drama happening with Guitar Center, which may also figuring into Fender's game here. With the recent failed IPO, You do have to wonder why Fender would be stretching the company so thinly.

http://www.reuters.com/article/2012/...NA678920120508

[tele12]

I know I'll get flamed on this one:.....but here goes:

Discontinue all Mexican and Chinese Fenders.

The first thing that will do is GC and everybody else will sell out of inventory
very quickly.

When they restock Fender can re-introduce the HWY 1 Series as the lowest priced
Fender.

Fender's Ensenada plant can be used for Squier,Guild, Jackson etc.

[Peltogyne]

Originally Posted by tele12

I know I'll get flamed on this one:.....but here goes:

Discontinue all Mexican and Chinese Fenders.

The first thing that will do is GC and everybody else will sell out of inventory
very quickly.

When they restock Fender can re-introduce the HWY 1 Series as the lowest priced
Fender.

Fender's Ensenada plant can be used for Squier,Guild, Jackson etc.

I think all their competitors will like this plan.

[CrisHendrix]

It seems to me that Fender is making some of the right moves.. right now there's a need for good quality, low cost guitars. The recent Indonesian VM Jazzmaster and Jaguars seemed to have been a huge success, as was the Chinese Classic Vibe before.. how many of Fender's American lines are selling out like this?

[musicalmartin]

My guess is that all these Asian imports like Squier and Modern Player are keeping Fender alive and to rely on US made models is suicide for a major international manufacturer like Fender .The market has changed and many just wont pay US made prices or more important can't .Kids will buy Ibanez or Yamaha if Fender go upmarket ,We may have fallen in love with Jimis strat or Hanks strat but todays kids havnt .They will buy whats cool but also what is a good price .A US made Fender isnt a good price for that huge pile of humanity that is called the rest of the world and a young Chinese guitarist may well be far more proud of his MIC Strat than any US version .

[uriah1]

Didnt guitar center, or the owner of guitar center, buy them out last year.

[emu!]

JMO, but I think it is bad marketing to label something "Made in the USA" and charge more for it when it really isn't any better than a non MIUSA.

You can fool some of the people some of the time, but...

[Dwills94]

I think gibson has proved as of late that it isn't impossible to put out an american made guitar in the under 500 dollar price range. What the last batch of melody makers were pretty easy to come by for like 300? All set neck, nitro finish, and pretty basic electronics. Why can't fender make similar strat and tele models in like 3 colors, red,white,and blue and call it a day. The fact they have bolt on necks alone should make it a reasonable assumption that production costs could be the same if not lower than what gibson was putting out for the MM. but then again I may be completely off the mark with what seems to be the trend of what is selling these days, which is not spartan workhorse guitars but unique specialized guitars that all set themselves apart somehow

[bossaholic]

I agree. Too much. They need to scale back and do what they do best. Making their best models and making them here in the US. People won't mind paying for quality. It's what made Fender great in the first place.

[StratBluesRock]

They sure ain't gettin my money any time soon..........I don't see myself buying any Fender guitars made after the 70s. I like vintage, and partscasters.

[willspear]

The curiosity is what will come of Bain and guitar center. People forget that guitar center houses a host of retail operations such as musicians friend.

Around April could get very interesting when that payment is due.


I think fender is on a good path with guild and gretsch now.

[tele12]

Originally Posted by musicalmartin

.....to rely on US made models is suicide for a major international manufacturer like Fender .The market has changed and many just wont pay US made prices or more important can't .Kids will buy Ibanez or Yamaha if Fender go upmarket ,We may have fallen in love with Jimis strat or Hanks strat but todays kids havnt .They will buy whats cool but also what is a good price .A US made Fender isnt a good price for that huge pile of humanity that is called the rest of the world and a young Chinese guitarist may well be far more proud of his MIC Strat than any US version .

Ibanez is now selling a Made in Indonesis Jem for $1400, so US Fenders are a great value.

FMIC has Squier, Jackson, Charvel, Gretsch,Guild to compete with the Ibanez and Yamaha etc..

The problem is all the Chinese suppliers will become competitors to Fender.
You can't sell a $300 Fender to the Chinese kid, he will buty the counterfeit coming out the back door that says MIA in it.

Fender should become the Flagship in FMIC's stable of brands.

The problem with chasing the low end is you are competing with the thousands of used MIM Fenders out their.

If you target the beginner the problem is most guitarists don't stick with it, so most of these guitars end up being re-sold at steeply discounted prices. The other problem is so many people with the MIM Fenders upgrade them with DiMarzio, Duncan,D.Allen, Callaham ,Rutters parts instead of trading up.

The one thing FMIC can't do is turn their flagship brand into commodity product which happens when you chase the low end.

[Peltogyne]

Originally Posted by bossaholic

I agree. Too much. They need to scale back and do what they do best. Making their best models and making them here in the US. People won't mind paying for quality. It's what made Fender great in the first place.

Fender was created as a low cost alternative to expensive "real" instruments and I would wager most of their profits are coming from that right now. From what I know of other companies I expect the imports are the bread and butter and the USA models are more for the showroom and PR.

I don't think the appeal to nationalism will help them either. People like to chant USA but the flags they wave while doing it are for the most part made in China because it's cheaper.

[Peltogyne]

Originally Posted by emu!

JMO, but I think it is bad marketing to label something "Made in the USA" and charge more for it when it really isn't any better than a non MIUSA.

You can fool some of the people some of the time, but...

I think we're coming from the same side here on using the US label to imply quality and increase price but I would say it's awesome marketing.