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Guitar Center Bankruptcy

GUEST,.gargoyle 21 Mar 18 - 11:13 AM
Joe Offer 21 Mar 18 - 03:52 PM
Joe Offer 21 Mar 18 - 04:08 PM
GUEST,.gargoyle 21 Mar 18 - 09:43 PM
Acme 21 Mar 18 - 10:27 PM
Mick Lowe 21 Mar 18 - 10:56 PM
Joe Offer 22 Mar 18 - 01:28 AM
EBarnacle 22 Mar 18 - 08:42 AM
GUEST,DWilliams 22 Mar 18 - 03:01 PM
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Subject: Guitar Center Bankruptcy
From: GUEST,.gargoyle
Date: 21 Mar 18 - 11:13 AM

Interesting article on the decline of guitar playing.

www.dailynews.com/2018/03/20/guitar-centers-1-billion-in-debt-reveals-truth-about-musical-tastes/

Sincerely,
Gargoyle

To lazy to learn?


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Subject: RE: Guitar Center Bankruptcy
From: Joe Offer
Date: 21 Mar 18 - 03:52 PM

Perhaps it's a little early to title this thread "Guitar Center Bankruptcy," Garg - but it's clear that Guitar Center is in financial trouble and must find a way to restructure $1 billion of debt.

I think it's worth posting the text of this article. It's from the Los Angeles Daily News. Can't say I'm familiar with the publication. I know only the Los Angeles Times and I used to read the South Bay Daily Breeze. Anyhow, the article:

Guitar Center’s $1 billion in debt reveals this truth about musical tastes
By KEVIN SMITH | kvsmith@scng.com | San Gabriel Valley Tribune
PUBLISHED: March 20, 2018 at 5:18 pm | UPDATED: March 20, 2018 at 9:05 pm

Guitar Center, the nation’s leading musical-instrument retailer, is in trouble. Changing musical tastes are partly to blame.

Ratings agency S&P Global downgraded Westlake Village-based Guitar Center Holdings Inc. for the second time last week as the troubled instrument retailer seeks to refinance and restructure more than $1 billion of debt.

“Most of what’s really selling today is rap and hip hop,” said George Gruhn, owner of the Gruhn Guitars shop in Nashville. “That’s outpacing other forms of music and they don’t use a lot of recognizable musical instruments.”

Shifting demographics
The company’s challenges speak to shifting demographics, something Gruhn is well acquainted with.

Guitars don’t figure as heavily into chart-topping music as they once did, says.

He ought to know. Over the years, his customers have included everyone from Paul McCartney, George Harrison and Eric Clapton to Neil Young, Vince Gill and Billy Gibbons.

Those artists have left indelible imprints on the music landscape, all the way from Clapton’s burning solo on “Crossroads” to Harrison’s signature guitar part on “Daytripper.”

But these days? Well, things aren’t as guitar-oriented.

“Baby boomers are the best customers I’ve ever had. They’ve driven a lot of the guitar trends, but they are aging and many of them are downsizing their guitar collections,” he added. “This doesn’t mean that guitar sales are dying, but instrument sales in general are under stress.”

No more guitar heroes
The instrument is also facing an identity crisis. Guitar heroes – who have inspired many a player and fueled strong instrument sales – are few and far between these days, according to Gruhn.

“I would be hard-pressed to name any new ones,” he said. “You’ve got Joe Bonamassa who is a great player. But he isn’t selling as many guitars as the other big time heroes. And Eric Clapton is arthritic. He’s having difficulty playing and is retiring from touring.”

Concotilli, owner of Mugzey Music in Canyon Country, spoke to the shifting demographics.

“Rock is almost dead,” he said. “It’s almost nonexistent. And with guitar there’s no almost one to look up to anymore – no one to get you to want to learn. I have three or four guitar students who are about 12 to 14 years old, and I told one of them she should find someone in her class to play guitar with. She said, ‘No one else plays the guitar, and people think I’m weird because I do.’ ”

To lazy to learn?
The bigger problem, according to Concotelli, is that most aspiring players don’t want to put in the time to become proficient on the instrument.

“If they do want to learn they’ll just go to YouTube, but they’re not getting the proper instruction,” he said. “With kids these days, it’s all about instant gratification. No one wants to take six months or a year to learn. They don’t want to do the work.”

A report released last year by the Washington Post revealed electric guitar sales have plummeted over the past decade from about 1.5 million sold annually to just over 1 million. The two biggest companies, Gibson and Fender, are in debt, and a third, PRS Guitars, had to cut staff and expand production of cheaper guitars, the report said.

Gruhn acknowledged that the demand for both acoustic and electric instruments has fallen.

“I think the guitar market was built up into a bubble at a pace that was unsustainable,” he said. “It’s leveled off to something that reflects more normalcy. Factories that were designed to produce 100,000 instruments a year may now find that their demand has dropped to 75,000, and that’s a problem because now you have higher overhead.”

Still, Guitar Center has forged on. The company currently operates more than 280 stores throughout the U.S. with Southern California locations in such communities as Westlake Village, Stevenson Ranch, Sherman Oaks, Northridge, Pasadena, Glendora, Rancho Cucamonga, San Bernardino and Orange.

The financial strains
Last week, S&P lowered the company’s rating to CC from CCC- and issued a negative outlook.

Guitar Center has issued $635 million in senior secured notes that will be due in 2021. Those notes and some additional cash will be used to refinance the company’s existing $615 million in secured notes which carry a lower interest rate and were set to mature next month, according to S&P.

By extending the timeline on its debt, Guitar Center will achieve increased liquidity and boost its financial stability for the next three years.

Still, analysts with S&P view the exchange as distressed because it falls short of the original bonds’ promise and creditors view it as a form of default. Guitar Center declined to comment beyond the news of its debt restructuring.

School of Rock
One of the brighter spots in the industry these days can be found in School of Rock, a Canton, Massachusetts-based chain of 207 music schools which span 10 countries worldwide. Elliott Baldini, the company’s senior vice president of marketing, said the schools are designed to draw students in by giving them more of what they actually want to learn.

“Music is at its core a social activity,” he said. “People get inspired to play because they listen to their favorite artists or see them at a live venue. But that experience isn’t translated when you take music lessons. It’s usually a very solitary, one-on-one experience experience with one teacher and the students aren’t necessarily learning the play the songs they want to learn.”

School of Rock offers something different, according to Baldini.

“We teach students of all ages the same music theory they’d learn anywhere else, but you learn to use that theory with a band. Students have group rehearsals where they can practice with a band every week. And we also have our version of a recital, which is really a rock show at a live venue. We put on more than 3,000 shows a year across the world.”

School of Rock has Southern California schools in Santa Clarita, Woodland Hills, Burbank, Pasadena, Redondo Beach, Tustin and Rancho Santa Margarita, among other locations.


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Subject: RE: Guitar Center Bankruptcy
From: Joe Offer
Date: 21 Mar 18 - 04:08 PM

I don't know if I can muster up much sympathy for Guitar Center. They're wonderful stores, and the Martin guitar displays in their acoustic guitar section are amazing. But they put a lot of local guitar shops out of business, and changed guitar sales from local business to corporate. I suppose they're similar to what Borders and Barnes & Noble did to local bookstores.

After they put the locals out of business, the corporate stores overextended their credit and built megastores everywhere. And now they're going out of business.

I'm wondering if the corporatization and resulting depersonalization of guitar stores is partly responsible for a reduced interest in music learning. The locally-owned stores were home to budding musicians, and each store was a center of a music community. That's not really possible at a Guitar Center.

-Joe-


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Subject: RE: Guitar Center Bankruptcy
From: GUEST,.gargoyle
Date: 21 Mar 18 - 09:43 PM

Joe thank you for posting the article. Your old-time local McCabbs continues strong.

RE:News Source

The "Breaze," OC Register, Whittier Daily, Long Beach PT, and a dozen other local Cal newspapers have ALL been engulfed by a mega-news publisher. (they have a curious internet news feed) .
The writer's name gives great insight via "scholar."


The Los Angeles Times, long ago left the Chandler estate, and was purchased in early March 2018 by.....Patrick Soon- Shiong.

Sincerely,
Gargoyle

FT, Al Jazeera, Gulf News, Arab News, TheNational.ae, , Jerusalem Post , WSJ, CSMonitor, help to balance local news bias. Howeever, it is what each ignore ..that create the "woof and warp' of alternative view points.


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Subject: RE: Guitar Center Bankruptcy
From: Acme
Date: 21 Mar 18 - 10:27 PM

My son was transplanted from Texas to Arizona to go to the university in Tucson (lured to a Tier 1 school by the offer of a full scholarship) - and the first place he wanted to track down after we unloaded his stuff at his dorm was Guitar Center. I talked to clerks and walked around outside while he spent an hour in their testing room playing a variety of guitars and pieces. He had at least one guitar with him in his dorm, but I think it was a psychic adjustment to find the place in a fairly strange town that made him happiest back at home. For him to go to that store was like my pilgrimages to REI when I was his age (and climbing mountains instead of playing guitars.)


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Subject: RE: Guitar Center Bankruptcy
From: Mick Lowe
Date: 21 Mar 18 - 10:56 PM

Can't say much about the guitar market here in the US apart from I bought a Yamaha accoustic the first couple of months I got over here.. Never paid much attention to the name of the shop, turns out it was Guitar Centre (sorry English spelling) on Erie Boulevard here in Syracuse. It was on sale and a great bargain, I know back in England I would have paid 3 times as much for the same instrument.

I think part of the demise as it's being called of the guitar is the price being charged for them, especially in Europe. My daughter has 2 PRS electric guitars that in England probably cost 4 times they sell for here.

I also think a major problem is the lack of live music or venues to play. My step son is big into electronic/computer generated music. Yeah a really great concert going to see someone standing over a computer keyboard. (That's sarcasm for those who don't recognise it. It's easier carting a guitar to a venue than an electronic keyboard.

Do they still "teach" music in schools anymore, Even music appreciation? I am as avid a fan of Mozart as I am of Fairport Convention and 5 Finger Death Punch because I was taught how to appreciate music rather than just blindly follow whatever music trend my peers were listening to.


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Subject: RE: Guitar Center Bankruptcy
From: Joe Offer
Date: 22 Mar 18 - 01:28 AM

What Acme says about Guitar Center is also true. They may be corporate, but they are musical instrument wonderlands, and the staff members are usually very competent. Guitar Center is not as sterile and impersonal as one might think they should be.

But I remember the Music Connection in Rancho Cordova, California. My sons and I took guitar lessons there from a music graduate student who became a music professor at Sacramento State University, and he became a friend and inspiration to all of us. And the kids took piano from the leader of a popular band in town. And while the kids were taking lessons, I'd hang out and talk German with the owner, Deinhard Schmudlach, an immigrant who was enthralled with wheeler-dealer American capitalism - but who treated every customer as family. Deinhard did well for a long time, and bought the whole shopping center where his store was located - but it's all empty now, and has been empty for years.

While mom-and-pop neighborhood music stores may be gone, the Sacramento area still has the legendary Skip's Music for rockers, and The Fifth String for acoustic musicians. I hope those metropolitan-level music stores won't disappear.

-Joe-

Gargoyle, thanks for reassuring me that McCabe's Guitar Shop in Santa Monica is still going strong. A couple of years ago, Stewart gave me a tour of Dusty Strings, a legendary acoustic instrument store in Seattle. So, maybe the independent metropolitan stores are still doing OK.


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Subject: RE: Guitar Center Bankruptcy
From: EBarnacle
Date: 22 Mar 18 - 08:42 AM

Unfortunately, Mandolin Brothers and Pietro Deiro have also gone the way of all flesh. Any decent instrument shop will have a place for you to try out the available instruments. Fortunately, luthiers also provide the same service.


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Subject: RE: Guitar Center Bankruptcy
From: GUEST,DWilliams
Date: 22 Mar 18 - 03:01 PM

Small guitar shops started the boom in instruments sales in the 60's and they should always have a place in the world, especially for guitars, basses, drums, amps etc. Guitar Center started small, as did Sam Ash Music.   They & others rode the baby boomer BOOM especially in the 80's when guitar music dominated and MTV was showcasing instruments on televisions 24/7/365.   Then the boomers got older.   I reluctantly agree that millennials seem to be the type that want to be a rock star but want to do it by tomorrow. IMO, this is about failed leadership and failure to grasp the meaning & needs for a post-baby boomer world. For this I believe NAMM must share in the blame while it's members are dropping like flies. For the guitar industry, the best hope might well be what worked before. It worked in the 60's, it worked again in t he 80's and it's cheap and highly effective. All we need is another Jimi Hendrix (saved the strat almost single handedly), Edward Van Halen (changed the world with his simple strats & a Floyd Rose tremolo) and others such as Slash, Steve Vail and other actual guitar players that did, alone with their band, that giant corporations, NAMM and others could not figure out how to do. Those guys inspired people to play. Somewhere in the USA, right now, their is a kid in his garage dedicated to learning how to play the instrument despite the lack of encouragement from his parents or relatives.   He drives himself to learn and all he has for inspiration is a musician he once saw or heard.   If you want your industry back, then learn to care about, find and inspire this guy. It's really not that hard to do. Typically, this guy will go to a small guitar store in his town. Here's hoping some snobby, want-to-be at GC does not send him the other way.


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