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Guitar Center Possible Bankruptcy (yet again)

Discussion in 'Bad Dog Cafe' started by warrent, Oct 26, 2020.

  1. memorex

    memorex Friend of Leo's

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    I haven't bought anything online from them in years. The nearest GC store is almost 30 miles from here, so I don't go there, either. They don't matter to me.
     
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  2. blue17

    blue17 TDPRI Member

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    I also don't have any clue what their debt structuring is, but there are also instances where if their credit rating drops below a certain threshold, even more debt could come due immediately.
     
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  3. Middleman

    Middleman Friend of Leo's

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    Guitar center is an example of a real world Schrodinger's Cat theory applied to retail. (can appear dead and alive at the same moment depending on who is looking).
     
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  4. Deeve

    Deeve Poster Extraordinaire Silver Supporter

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    See generally 11am Tuesday morning - problem solved - you're welcome.
    Yet unsolved: finding a sales dood (or doodette) who can tell you anything about the product that can't be read from the box, on your own.
    Anyway, popcorn bowl has been set up & ready for action. ;)
    Peace - Deeve
     
  5. Mike Eskimo

    Mike Eskimo Telefied Ad Free Member

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    Never work retail.

    And if you do work retail, sure as hell don’t work retail where everyone wears the same shirt…

    but really, never work retail.


     
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  6. ab2012

    ab2012 Tele-Holic

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    There was a recent article that stated during the pandemic they did very well selling guitars as people that were shut in were buying guitars. They were supposed to open a store in Hawaii.
     
  7. stantheman

    stantheman Doctor of Teleocity

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    Good Riddance. See Ya.
     
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  8. Allan Allan

    Allan Allan Tele-Holic

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    I must've come of age in a transition year, I always preferred guitar center to the mom and pop store. They'd let me play the guitars and leave me alone. The guy at the mom and pop store would play the guitar and Yammer on and on about musicians I didn't like and then hover over me while I tried to remember anything at all to play.
     
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  9. blue17

    blue17 TDPRI Member

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    What do you mean?? I would have had no idea that the $99 Squier wouldn't be good enough for me to grow on, but the $149 is everything i need, bro!
     
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  10. brookdalebill

    brookdalebill Tele Axpert Ad Free Member

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    Though I (totally) agree, uh, too late.
    Anyways, I did retail for eons.
    It will indeed vacuum your soul.
    I have decades of retail experience, usually six days a week, usually in management.
    Youguns, listen to the geezer.
    Do almost anything else to keep a roof over your head.
    I did graduate, and haven’t done retail in ten years.
    It wasn’t all bad, my last one was mostly good.
     
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  11. blue17

    blue17 TDPRI Member

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    Guitar stores, and most retail for that matter, is sort of like a good barber. They chat when you want to chat, leave you alone when you want to stay quiet.
     
  12. Askwhy

    Askwhy Tele-Meister

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    There ya go, much more thoughtful post than all the "GC sucks" prior and to come.
     
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  13. StevesBoogie

    StevesBoogie Tele-Holic

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    My unpaid GC credit card very likely brought them to their knees
     
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  14. Greggorios

    Greggorios Friend of Leo's Silver Supporter

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    I completely agree, no question. Maybe a new or updated business plan or model to go with a new CEO.
     
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  15. ReverendRevolver

    ReverendRevolver Tele-Afflicted

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    They were pretty bad off. Lots of the figures Fender put out point to online sales booming, and new players not liking the public aspect of brick and mortar.
    Guitar Center is garbage at utilizing a multi channel strategy between digital and physical stores. It's too late in their pile of debt to overhaul the interface much, but non negotiable used prices where you pay to ship between 2 of thier own buildings isn't forward thinking. I was in there one day and a $370 AC15 used was on the website the night before, but sold. It was off the salesfloor at open. But as I amp shopped, they got like 10 calls about it. Apparently takes a day to vanish from their site. They were set up to be successful, but invested last year heavily into live sound equipment when non-niche market trends showed last year multichannel and digital were growing.
    Article last year showed them confident in taking a strong role in live sound and DJ equipment. This was not the year to invest in that stuff over bolstering thier digital and omnichannel sides. Tough break. They'll flounder and get eaten I'm sure.

    But yes, record year of guitar sales would have been great if they would have used thier physical stores as a competitive edge over Sweetwater, zzsounds, reverb, etc. As of now, it was an excellent year for thier competition.
     
  16. chris m.

    chris m. Poster Extraordinaire

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    GC is "too big to fail", at least for now. Too many equipment manufacturers are owed money by them and rely on them as a major distribution channel. If no one else will do it I could imagine a consortium of the big gear manufacturers somehow underwriting GC's restructuring plans....because that's going to be much better for their finances than writing off absolutely massive losses.

    One thing they do have going for them is that interest rates are at historic lows. So even with a low credit rating it is conceivable that they could have their debt restructured under terms that make the cash flow math work a lot better. Another thing they have going for them is that as noted the industry as a whole is experiencing great sales. So it should be easier to make the argument that with better management and better strategy it should be possible to get back into the black.
    Finally, there are lots of investors out there sitting on absolutely giant piles of cash and looking for opportunities to diversify their holdings with a willingness to take on risk, as long as it's perceived as a diversified risk.

    They do need to adjust their business strategy, though.

    With regard to the issues of cacophony and inventory, that depends on the store. For example, the GC in Oxnard, CA has a sealed room for testing and hearing acoustic guitars, and another sealed room for testing and listening to higher end amps and guitars. They also carry a decent inventory ranging from el cheapo to top of the line of most major brands. There's the big, main room, and that is noisy. The smart play is to always go in the middle of the day during M-F when the kiddos are all in school.
     
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  17. USian Pie

    USian Pie Tele-Meister

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    Definitely not meant as a criticism of the OP because it's interesting but... hasn't the "Guitar Center is in financial trouble" story been coming up for over 10 years?
     
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  18. archetype

    archetype Fiend of Leo's

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    Yes. The fact that it's been happening for that long is evidence that it's not getting fixed. It's a car crash that happens continuously.
     
  19. Deeve

    Deeve Poster Extraordinaire Silver Supporter

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    either that or the unlimited return policy for pedals
    :eek:
     
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  20. burntfrijoles

    burntfrijoles Poster Extraordinaire

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    GC isn’t going away. It will restructure yet again. Perhaps they’ll trim some fat, close unprofitable stores, etc but it will survive. Perhaps they’ll sell some stores.

    The last thing Fender, Gibson, Taylor, Martin et al want is to see them close their doors. All of those companies have bloated product lines which hurt the retailer but the manufacturers have to someone buy their bloated lines to fill up the distribution channels.

    Mom and Pops aren’t coming back.
     
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