# Eric Garland: The End of Guitar Center



## Guest (Feb 3, 2015)

http://www.ericgarland.co/2015/02/03/end-guitar-center/



> 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.
> 
> ...
> 
> I submit that Webb is the perfect choice for his likely mission: to lead the company into an orderly bankruptcy.


He makes a compelling argument. So much for big box ruining it for all the indies for all time. Cool.


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## zdogma (Mar 21, 2006)

It won't let me access the article...


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## Tarbender (Apr 7, 2006)

Wow. Thats quite the read, and if true also means the end of Musicians Friend also?


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## greco (Jul 15, 2007)

zdogma said:


> It won't let me access the article...


Same here...Could someone please copy and paste the article. Thanks.

Cheers

Dave


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## Guest (Feb 3, 2015)

His web site is thrashing a bit under the load. 

Here's a PDF of the article: https://dl.dropboxusercontent.com/u/870088/Eric_Garland-The_End_of_Guitar_Center.pdf

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Tarbender said:


> Wow. Thats quite the read, and if true also means the end of Musicians Friend also?


Are they the same company? I don't know which way the mergers went. There's also Sam Ash, Music-1-2-3 and Sweetwater -- not sure how, or if, any are related?


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## Milkman (Feb 2, 2006)

I wouldn't shed a tear if they went down. I've used them as a price reference and received the same price (factoring in exchange) at my local shop.

Same goes for our Canadian chains.

Loyalty has its advantages.


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## Scotty (Jan 30, 2013)

So there's hope for the mom & pop shops again? Lets hope so.

I'd like to know just how many retail conglomerates are hosing their shareholders also...People like that belong in jail


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## Guest (Feb 4, 2015)

In case you missed it in the article:



> 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.


(Bold was me) Part of the downfall stems for lousy majority shareholders pushing it in ways it wasn't meant to be pushed. And the CPPIB is one of them. The CPPIB is actually a really powerful money force. I know people who work on investment and trading software there -- custom-designed trading algorithms that play with zero-loss hedging bets and hundreds of millions of dollars.


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## Milkman (Feb 2, 2006)

Yup that sort of stood out for me too.

Canadian Bastages!


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## Steadfastly (Nov 14, 2008)

This has been predicted for at least 3-4 years now. The whole industry knew they were in real trouble long ago.


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## Beach Bob (Sep 12, 2009)

My understanding has been that for the last couple of years, the only reason they survived was by debtor financing (i.e.... the manufacturer's holding off on getting paid). Every time I've walked into a GC, I've hated the experience... way too big and impersonal...

I hope that L&M is taking note... they seem to be focused on following the big box model... and I hate going to them now too...for the exact same reasons...


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## cheezyridr (Jun 8, 2009)

i think all of you guys who hate on big box stores are in for a real surprise if you get your wish. better be careful what you wish for. as for L&M, i really don't understand folks who have a mean-on for them. i have never once gone in there and not received excellent service. maybe there are some bad ones out there, i don't know. but the ones i have been in, are good stores that i enjoy going into.
by contrast, there is a mom & pop type place 2 blocks from my house, and i'll do w/o before i set foot in there. they're snotty, overpriced, and their selection is....less than great, unless you want to buy an acoustic. if i can save $60 by going to L&M to buy an amp that was less than $150, vs walking 2 blocks down the street, i'm gone.


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## Beach Bob (Sep 12, 2009)

cheezyridr said:


> i think all of you guys who hate on big box stores are in for a real surprise if you get your wish. better be careful what you wish for. as for L&M, i really don't understand folks who have a mean-on for them. i have never once gone in there and not received excellent service. maybe there are some bad ones out there, i don't know. but the ones i have been in, are good stores that i enjoy going into.
> by contrast, there is a mom & pop type place 2 blocks from my house, and i'll do w/o before i set foot in there. they're snotty, overpriced, and their selection is....less than great, unless you want to buy an acoustic. if i can save $60 by going to L&M to buy an amp that was less than $150, vs walking 2 blocks down the street, i'm gone.


I'll stand up as one of the big box haters.... I totally hear what you're saying, and to a large extent, I believe you are right....

There are different types of shoppers with different needs. I prefer quieter, more private opportunities for playing an instrument. Standing in front of a wall with 100 different guitars is just too cold and impersonal for me. Add in 100 other shoppers doing the same thing and it becomes a zoo. My nearest L&M has decent staff (most are gigging musicians), and L&M is a decent company, by and large. I just don't like the impersonal shopping experience.

Secondly (and this is where GC falls into a trap)... there is a limited number of buyers. Big box retail on durable goods is a doomed proposition. It can work well on consumable goods, but on stuff that will last decades, you can only sell so much before the market is saturated. I truly believe GC has hit that point, and that's why in my previous message on the thread I said that I hoped L&M were taking notes. I don't want L&M to fail... I think its in everyone's best interests for them to stick around.. rapid over expansion is the concern.


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## dradlin (Feb 27, 2010)

That's a good read. I especially like the Behringer reference in the closing paragraphs... growing their sales through smaller stores.

Eric Garland was also interviewed by the Fretboard Journal on this same topic. See podcast 77.

http://www.fretboardjournal.com/audio

In that interview he speaks enthusiastically about the small boutique builders... passionate and creative people doing great things within modest margins, and the $2 billion dollar GC market share could in part well feed the boutique builders.


Sent from my iPhone using Tapatalk


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