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Guitar Center files for bankruptcy
- guscost 6y agoHooray! (Not only because they are owned by Bain Capital). Hope most of the employees land OK.
- airstrike 6y agoBain Capital and retail seems to make for a toxic cocktail
- ghaff 6y agoNot that private equity doesn't have its problems, but usually by the time PE is involved, things were already on a pretty serious downward trajectory.
- digitaltrees 6y agoNot really. PE takes good businesses, strips the assets, loads up debt and issues a dividend. Then shockingly files for bankruptcy.
- missedthecue 6y agoThis is popular to say, but doesn't hold up to reality. An analysis of "17,171 worldwide leveraged buyout transactions that include every transaction with a financial sponsor in the CapitalIQ database announced over a 40 year period" found bankruptcy rates around 6% [1]. This isn't notably out of the ordinary. Large deals get press. They also have a habit of involving over-extension. As a result, the average private equity story is about things going spectacularly wrong at scale. [1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.121 https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.23.1.121 Table 2
- airstrike 6y agoI'd like to run the numbers on just the Bain Capital retail acquisitions...
- deleted 6y ago[deleted]
- gamblor956 6y agoNo, Bain has a unique history of acquiring companies that are doing fine pre-acquisition which struggle post-acquisition because they are saddled with acquisition-financing debt placed on them by Bain and thus cannot afford to invest in product development, renovating stores, or other necessary business expenses. Worse, Bain takes the money that would have been used on corporate reinvestment in the absence of an acquisition, and which should be used to pay down the acquisition debt arising from the acquisition, and uses it to pay themselves hundreds of millions in "management fees" despite not actually managing anything. Also, PR to congratulate themselves for the wonderful job they've done "cutting expenses," meaning the tens of thousands of jobs that were cut so that Bain could get paid. Bain is parasite. They've always been a parasite, to the point that they even found ways to turn their few successes (like Staples) into failures.
- mark-r 6y agoThis is a chapter 11 bankruptcy, which usually brings about debt restructuring and some store closings. I would hope most of the stores will remain and the employees will continue as if nothing happened.
- tssva 6y agoAccording to the article they reached debt restructuring and recapitalization deals with their lenders before even filing. The bankruptcy proceedings should be short and they should come out mostly intact.
- jpseawell 6y agoI worked there once as a sales associate. Worst job I’ve ever had. Disclaimer: I am terrible at sales.
- robbyt 6y agoAny interesting stories?
- sushshshsh 6y agohis ears probably still ring all day
- jpseawell 6y agoOne time an old guy faking a limp walked out with a $3k Les Paul stuffed down his pants. Our managers chased after him and tackled him in the parking lot. Afterwards they were reprimanded for creating a litigious situation... Other than that just a lot of teenagers butchering their Dad’s favorite songs on guitar.
- poisonarena 6y agoI worked in the LIVE PA/Electronic music section, I knew way more about synthesizers and sound systems than anyone else working in the department, but they kept pressuring me to try and sell crap like top of the line MPC's to people who obviiously might have trouble financing them. Some of the snakiest people I ever met. Within two weeks of my "Oh well you could just buy this xxx groovebox on craigslist, you're better off man" instead of tricking someone they put me on the door.. It was just me pretending to work and check receipts next to this late 40s something overweight security guard who kept trying to talk to me about alex jones conspiracy stuff all day until a few days after when I disappeared and never showed again.
- anodyne33 6y agoI've heard several second hand stories of people dumpster diving and after some investment of time and money winding up with at worst, serviceable instruments. Any experience with that? I went in for the first time in years last week for rack screws and was surprised to see they no longer had an associate checking orders on the way out. Guitar tech I wound up bothering said, and it makes sense, that putting someone at the door was more expensive than the shrink.
- mark-r 6y agoI hope they make it through to the other side. When I was looking for headphones a couple of years ago, Guitar Center was the only place I could find where I could physically compare them side by side. Online will never replace that.
- wolco2 6y agoThat's a future VR feature. Online will provide that and offer you a germfree experience.
- robomc 6y agolol what
- war1025 6y ago> That's a future VR feature. I doubt comparing the sound quality of multiple pairs of headphones is going to be something VR can simulate.
- AdamJacobMuller 6y agoI'm not sure how "real" it is, but, as the commentator above mentioned (though I've also used it before), this already exists: https://www.crutchfield.com/S-X7TESAG94kk/speakercompare/default.aspx https://www.crutchfield.com/S-X7TESAG94kk/speakercompare/def...
- war1025 6y agoThat technology is using good headphones to simulate the acoustic properties of large speakers. For a more obviously untenable example: Imagine using an old VR headset to test out newer, more capable VR headsets.
- wolco2 6y agoLike many people now we would buy the newest popular model and read reviews. How can you try out a new computer when buying online through your old computer? You don't. You rely on Specs.. reviews.. brands.
- ChuckMcM 6y agoNot going away, just restructuring. I have fond memories of hanging out in Guitar Center. I hope that this is just a blip and not the first in a series of moves where stores selling music making gear become extinct. That has been happening to electronics making stores and it doesn't bode well for the future.
- beardbound 6y agoWhen I was in music school (before the financial crash and I eventually got into software) my friends and I would quite often hang out at Guitar Center and play the guitars and other instruments that we couldn't afford. I have many fond memories of that. I also bought my last guitar there, and some audio/recording equipment. It's one of my favorite retail places, especially since I don't like shipping acoustic instruments if possible. Although I have started to order more of my stuff online through Sweetwater. With the pandemic I try to avoid brick and mortar stores as much as possible. Although I do still occasionally order from them if they have what I want in stock and other places don't. I don't order audio gear from Amazon due to the proliferation of counterfeits.
- foobarian 6y agoMy favorite thing about GC is their climate controlled guitar section, where there is an outer and inner sanctum with the most precious instruments. I would occasionally even run into amazing musicians just trying things out. I feel bad I was not able to afford such nice instruments but I often bought some other things along the way like sheet music, accessories etc.
- deleted 6y ago[deleted]
- brudgers 6y agoI think the era of stores where people hang out is past. Record, camera, and stereo shops hung on longer than computer stores. But even book stores seem to have had their run. At least at chain scale. An electric guitar was cutting edge cool sixty years ago.
- francis_t_catte 6y agoEvery Guitar Center I've visited in the last year or two had that 'going out of business' feel. Not surprised to find out Bain Capital was involved.
- Scoundreller 6y agoReal question is how much value they stripped out before they filed.
- jeffbee 6y agoAll of it, essentially. The company lent Bain the money needed to acquire itself, Bain didn't bring capital to the deal. Then, over the course of 13 years, the company paid Bain hundreds of millions of dollars in management fees, in cash. So Bain already got paid. They got hard money for driving the company straight into the ground.
- AtlasBarfed 6y agoSounds like Sears
- jeffbee 6y agoWell, the guy who bought Sears did it the other way around, lending Sears a lot of money on secured loans and taking the interest out, as well as taking out cash through stock buybacks. But the process is similar: gain a majority stake in a company by whatever means are available, appoint yourself as the chief executive, and manage the company with the goal of enriching yourself, rather than with growing the company. The structure of the Sears deal was really interesting and suspicious. Sears bought a small number of Kmart stores for an enormous cash price, which sent Kmart stock into orbit, then Lampert used the inflated Kmart stock to acquire Sears. Pretty shady. Another difference is Lampert is a black sheep, but Mitt Romney is for some reason still socially accepted despite having wrecked dozens of American companies.
- 6y ago
- deeblering4 6y agoLet’s take a moment to pay our respects /me begins badly playing stairway to heaven
- fallingfrog 6y agoGuitar center was bought by the private equity firm Bain Capital in 2007. So this ought to be no surprise. Most likely they will just use the bankruptcy filing to get out from under their tremendous debt burden, then be back in business at some point.
- dboreham 6y agoOdd because according to a friend who works for one of the major guitar manufacturers, they are recording their best sales numbers ever thanks to quarantine instrumentalism.
- offtop5 6y agoVery bad news imo. Having everything flow into a Amazon Monopoly of retail isn't great. Even just going in the stores to talk and get a literal feel for instruments is great. The biggest issue with online retail is it erodes one of the last community functions. Particularly for older Americans retail shopping might be their only social interaction all day. If 2050 is this dystopia where everything is ordered online, all food is dropped off by drones, it's going to be very bleak. That said retail, particularly non essential retail ( my various instruments are all effectively toys, I'd guess the working musician to hobbyist ratio to easily be 1:100) is getting hit hard. No one NEEDS a news 1500$ Gibson. Edit : Worth while to add a with concerts being shut down the professional market is effectively dead as well. I wouldn't count on this returning until late 2021 at best
- kampsduac 6y agoAgree that extra online market is not good, but I am lucky and have an awesome, locally owned family shop right by my house (Guitar city / drum land in wheat ridge colorado). They are great, usually beat Guitar Center prices by ~10% via bonus gear or cash discounts, and has a more legit musician feel to the store. If GC ends up closing, hope more local shops can benefit.
- gtfoutttt 6y agoAmen. We've got a couple local music instrument stores here too. But I feel for my buddies that make electronic music. They loved GC since they could try out the synthizers and drum machines before they bought.
- the-dude 6y agoIn the EU online purchases can be returned for any reason within 2 weeks? ( not sure about that period though ).
- alangibson 6y agoIn many cases, yes. It's called 'right of withdrawl.' There are quite a few exceptions though.
- S_A_P 6y agoGuitar Center definitely shifted to "mainstream" and de-contented stores after bain got involved. Maybe that is the only real path forward, but I dont ever stop into Guitar Center anymore since they usually only have the prosumer-ish gear that Im not interested in. They also seem to have much less used gear in each store, despite the influx of 'sell yer gear here for cash' emails I get from them. Edit: Another thing- part of the problem for US based retailers in general is MAP. Its price fixing, and in many cases I can go to, say Thomanmusic.com and order something from Germany for ~85% of the best price I can get at major retailers here, including shipping, tarriffs and foreign transaction fees. Personally I think MAP is ridiculous and leads to TREMENDOUS waste of resources. Im buying something that was shipped from China to Europe, then shipping it back to Texas all for less money than US retailers will allow. WHY IS THAT?
- mjh2539 6y agoCan you please define "MAP"?
- 1123581321 6y agoMinimum Advertised Price. The FTC has a good primer on it and why it is sometimes acceptable. https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain/manufacturer-imposed https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
- S_A_P 6y agoMinimum Advertised Price. While it is possible in some cases to negotiate with a store, most of the time they ask you to get a price in writing that is lower so that they can match it. A few problems with that- 1) MAP is the minimum Advertise-able price so you wont find that anywhere online searching, and stores aren't exactly excited to quote you lower just so that you can take it down the road to get a discount... Edit: Also Ive tried getting a lower price on gear in the US by showing the all in Thomann price, and the response I get:We do not honor non US pricing.
- JohnJamesRambo 6y ago
- 8f2ab37a-ed6c 6y agoWonder if we'll see Sweetwater & Musician's Friend open physical stores in the future around major hubs. Or if small boutique music stores like https://www.perfectcircuit.com/ https://www.perfectcircuit.com/ will become more of the norm, instead of the big chains.
- Raidion 6y agoI'm consistenly blown away by Sweetwater's service. Also they have individual photos for each guitar, so you know exactly what you're getting. Obviously some people are going to want to try out stuff before they buy, but usually high end guitars are quite solid out of the box and after a setup(and especially if you get it PLEXed) Honestly all guitars are pretty solid now. CNC has made the lower end significantly better than they used you. You don't often have misaligned necks and stuff like you used to because it fits pretty dang good already out of the CNC machine.
- wyclif 6y agoI love that feature. Photos of the actual guitar under consideration are important if you're buying a clear coat electric guitar and you want to see the wood grain you're shopping for.
- DoofusOfDeath 6y agoTotally agree about Sweetwater's service. I had trouble finding a peculiar A/C adapter for a Roland synth. The part costs like $60, so it was never going to be a high-margin sale for Sweetwater. Not only the the CS rep get me a predicted availability date by talking to their internal supply guy, but he also checked back in with me about a month later to see if I was all set. I'm now highly biased towards buying from them. EDIT1: Credit where credit is due: The CS rep was Calvin H. EDIT2: As an interim solution I had to build my own AC-DC converter to meet the unusual specs. It was surprisingly cheap and easy. I can post details if anyone is interested.
- Applejinx 6y agoFunny thing about Sweetwater service. (and I say this even though I've got a friend boycotting them because he says their hiring practices are outright racist) I've got stuff from them, even large quantities of stuff. I leaned on them for special pricing seeing as I was spending thousands of dollars with them, and got some traction with that: moderate extra discounts and price breaks. I didn't like the candy thing, so I told them not to do that. They stopped doing that. They badgered me to see if everything was okay. I got phone calls while I was making livestreams, stuff like that. I told them not to do that: in fact, to never speak to me again and I would call THEM if I wanted to get anything else. They stopped badgering me. It's been maybe a year now. Not a phone call. I did also tell them not to send me postal mail advertising either, because I will just recycle it. They have not honored that one. So: their service extends to listening when you tell them NOT to badger you for more sales, and they listen ALMOST completely.
- systemvoltage 6y agoIt's bitter sweet. It was a soulless store with underpaid and often (rightfully) rude employees. The customer base was completely asinine where I used to go shop - some dude on the drum machine for way too long. Sweet, because when I was little I didn't see any of this and it was a marvelous store to go to and it made me learn music.
- gokhan 6y agoBeing underpaid does not legitimize being rude.
- xiphias2 6y agoThere's a minimum amount of money you need to pay to be able to attract competent sales people inside a shop in a stable way. I'm right now in a hotel, and I wish there would be half as many people who were doing their job well.
- systemvoltage 6y agoTrue, I meant that they had to deal with all these rude customers so it just becomes a pattern. It's not good to generalize, I concede.
- woah 6y agoI worked there a long time ago. The best performing salespeople had big customers who would buy a lot of gear at a time. 90% of the regular people walking through the door were just there to mess around, and would not purchase anything. If they came back later, ready to purchase something, another salesperson would be getting the commission. There was also high turnover. Those 3 factors can lead to rudeness.
- roughly 6y agoCounterpoint: Underpaying someone doesn't entitle you to much.
- rubicon33 6y ago
- gokhan 6y agoI was under the impression that lockdowns increased instrument sales, especially guitars [1]. guitarcenter.com seems to have online sales but it's not designed to preferably sell online, it seems. And somewhat neglected? For example, Fender link from New Arrivals page gives 404 [2]. COVID really increased the rate of change for everything. Companies playing online first saw the boost, while companies doing it as if 30 years ago failed fast. [1] Lee from Andertons was telling lockdowns are nothing to complain about, bussiness wise. [2] https://www.guitarcenter.com/Fender-American-Pro-II-Guitars-Basses.gc https://www.guitarcenter.com/Fender-American-Pro-II-Guitars-...
- ev1 6y agoCompared to Sweetwater or any of the other ones, GC's webstore is one of the worst I've ever used. Pre-COVID, GC's irlstore was generally overpriced, they refused to price match anyone, things like earplugs would be double the price of most places, and their brand/stock lineup was not very useful. It felt like you were nowhere near the prosumer/power user/pro user lines, but at the same time you were incredibly overpriced past beginner items.
- qppo 6y agoTheir web retail is through Musician's Friend, the GC website is mostly a front end for their in store stock.
- ev1 6y agoI'm largely interested in used/refurbished items, I don't usually have a thousand to blow on hobby music gear & would prefer store curbside pickup (packages in San Francisco get stolen within seconds of arriving). For online, ship to store/pickup in store is super important to me (and probably many others). I'm not sure why more places don't offer it. This also being said, I don't believe I've ever found GC/MF in person to be useful or any better than Amazon. No one working there was actually knowledgeable about their lines of products or about instruments in general, they just kept harassing me over buying worthless GC-offered third party warranties that they refuse to pay out and covers nothing
- nickthemagicman 6y agoThe name Bain Capital just sounds evil. Guitar C. was my favorite place to go and not buy anything because I don't have 1000 drum machine disposable income. Almost all of the people I met working there were pretty talented musically and it was a shame how little money they were making.
- geofft 6y agoGuitar Center seems to have the Barnes & Noble problem, that is, they provide a valuable service in allowing you to browse, compare, and try out products, but they attempt to make their money from the product itself, which you can buy online from a non-brick-and-mortar store for cheaper. I've been to Guitar Center much more often than I've bought anything from there. And both of these companies, being national chains, have the capital to out-compete local independent book / music stores, but because they're a chain, they won't inspire loyalty. I might feel like I should pay a little more to buy a book from Greenlight Bookstore instead of Amazon; I don't really feel like I should extend this courtesy to Barnes & Noble. How do we solve this problem in a sustainable way?
- ghaff 6y agoI thought manufacturers in at least some product categories would feel they had to step in to provide showrooming options. But with some minor exceptions e.g. camera manufacturer displays with an employee there to answer questions like at B&H, they really haven't. There are probably still enough physical chains to muddle through (Best Buy, Staples, Home Depot/Lowes, etc.) to cover a lot of the mainstream big ticket items people would buy. As for Barnes and Noble, I'm not sure they provide a particularly valuable service. I can see previews of a lot of books online, read reviews as I browse, and get most things in print in a couple of days. I'm actually not sure the last time I was in a B&N.
- Raidion 6y agoI think this might not be a solvable problem. If you have a brick and mortar store, you're going to have to use it to drive value in ways that an online business can't. If your business model doesn't really support your expenses, it's a problem for your business model, not for anything else. Other stores solve this problem by using the brick and mortar locations as warehouses that can ship as fast or faster than amazon at a competitive price. This also enables same day pickup at a lot of stores, which amazon struggles to do. Stores that don't have the volume or margins (like guitar center) to support the physical locations are in for some hard times.
- indymike 6y agoOk, so bass player here... First, if Guitar Center has done more to improve the sound and lighting at local churches across America than anyone, ever. As far as instruments go, I love smaller, local guitar stores because they often carry product you just don't see in the big stores outside of the used gear department. I've ran into all kinds of cool stuff ranging from some really nice amps made in some local dude's barn to custom shops, to one store that was importing insanely nice boutique brand guitars directly from Japan (I picked up a short neck bass there and played it for a decade before I gave it to an aspiring player). Guitar Center was cool and all, but really, I don't need 168 perfectly mass-produced bass guitars to choose from. If I'm going to drop $2000+, well, that goes a long way towards something custom from a local luthier. So much of music is about expressing yourself... If you want to sound like everyone else, play the same guitar the same way as everyone else. That said, Guitar Center and Sam Ash really do a great job making pretty good equipment affordable and more importantly, easy to get.
- mullingitover 6y agoI wonder how much online competition from Reverb had a hand in this. I shopped around and purchased a quarantine guitar this year (a fantastic 1990 Alvarez-Yairi DY-90), and Reverb was a much better deal and a better shopping experience. Reverb is a platform, and so they're getting everything from individual sellers to small music shops all over the world. I looked at things on Guitar Center's site, but they're just selling the same factory-built stuff every other major retailer sells.
- coding123 6y agoThere are a lot of companies that started to do really really well because of the pandemic. Can you imagine the pizza chains that started pumping out commercials for curbside EARLY and repeatedly? All reports are that pizza chains are doing BETTER than before. It's because people need to see that the chain is doing something specific that adapts to their needs. Instead I see most companies looking out at the street, waiting for people to walk in. I even had some restaurants that turned me away because I refused to go inside. However some of those restaurants also walked the food out - I just had to wait for the right staff member. In any case - if this isn't the penultimate test of all companies' willingness to adapt fast and intelligently, I don't know what is.
- macintux 6y ago“penultimate” isn’t the word you’re looking for. At least, I sure hope it’s not an accurate prediction that we’re going to face only one more test.
- coding123 6y agoyeah, probably not the best choice in word sorry
- deleted 6y ago[deleted]
- bluedino 6y agoOddly enough, while the local Panda Express has a drive through line wrapping around it almost the entire day, we’ve had two local Chinese places close their doors. And one is right down the road from the Panda Express!
- totalZero 6y agoIt seems like COVID-19 has been a killing blow for many companies. One thing I would do if I were running a brick-and-mortar retailer is to figure out how to manage same-day deliveries, using the retail locations as distributors. Buy a used UPS/FedEx truck for every retail location, and send a guy out in the morning to make onsite deliveries. People can come back to the store for returns, and they can order large items that would otherwise be undeliverable or heavily delayed from the likes of Amazon. The idea of blended warehouse/retail locations could make the logistics simpler and speed up delivery, even if you use a shipping carrier to do the delivery and/or serve areas that are not within ~100mi of a retail store.
- arrosenberg 6y ago> It seems like COVID-19 has been a killing blow for many companies. Yes, but it is worth pointing out that COVID is killing already-sick businesses. Guitar Center was doomed from the moment that Bain Capital bought it in the early-2000s and started raiding it. COVID will be listed as the immediate cause-of-death for many, many businesses, but what made them susceptible to a shock is the private equity vampire.
- totalZero 6y ago> Yes, but it is worth pointing out that COVID is killing already-sick businesses. 100% agreed. I should have written that COVID-19 has been a killing blow for many already-sick companies. Still, if you're running a distressed company, your attitude must be, "we are not dead until we're dead." Channel your inner Dylan Thomas and rage against the dying of the light. I have a mid-60s relative who teaches music privately, via Zoom. Her business is more active now than it was when she was teaching in person, due to fewer costs for transportation and less downtime between lessons. I'm not sure how sustainable that surge in activity will prove to be, but she has at times asked me to help her buy musical instruments online for new students. It's anecdotal evidence that suggests music education isn't going away just because brick-and-mortar retail is under pressure. School closures aside: if someone is going to sell guitars and drum kits, why can't it be Guitar Center? Amazon has put retailers in the position where they have to compete on price, information, ease of returns, and shipping speed. A dedicated retailer (music store vs general store) should be better at competing on price and information. A local store should be better at competing on ease of returns and shipping speed.
- softbiz 6y agoIronically, also posted on HN this morning - "Fender sales boom as guitar playing surges during the pandemic (cnbc.com)" https://news.ycombinator.com/item?id=25179031 https://news.ycombinator.com/item?id=25179031
- sheriffderek 6y agoI prefer smaller stores. Probably not going to miss them. If I can't get something local, for some reason Sweetwater has been my go-to for the last 20 years. What I don't understand is "filed for Chapter 11 bankruptcy" == "Guitar Center, which owns nearly 300 stores across the country, said business operations will continue without any interruption." ?
- bluGill 6y agoThere are different levels of bankruptcy. Chapter 13 is we are done, if we owe you money then you can fight with the others we also owe money for your share of what we own. That means you get all the hooks the cables were hanging on. (almost always someone sells them for you, but in theory you could accept the physical hooks) Chapter 11 has different rules, you are trying trying to stay in business, but need to not make payments for a time.
- acd 6y agoI hope some will go and shop in local stores although its often more expensive than shopping online. Or shop in hybrid local/online stores. Otherwise city centers will become less diverse and mostly filled by things that cannot be bought online.
- headeffects 6y agoFuck. I was just there and wondering how much money they could be making. The stores are so big and seem so empty compared to the Best Buy next door. I was comparing studio monitors and headphones with the intention to buy there in the near future and got good advice from the guy working there about everything I asked, he had first hand experience with all the stuff I was looking at.
- jacquesm 6y agoInteresting how this is happening in what is probably the biggest boom for selling music gear the world over. So many people that I know have used the pandemic to expand their music skills and nearly all of them have bought stuff to do so. To the point that getting fairly ordinary gear became next to impossible because it was back-ordered for weeks.
- ugh123 6y agoI bought a new guitar from them back in August. Talking to the saleswoman helping me, she revealed that the used market for guitars had ballooned during the pandemic, but new guitars were still widely in stock. Hopefully that's just a short term symptom and they can return healthy next year.
- patwolf 6y agoI have a friend that owns a small mom and pop instrument store. He had to finally stop selling guitars because too many people would use his store to try them out before buying online. I can only imagine Guitar Center experiences the same problem. In his case he was fortunately able to pivot to a very niche market and is doing quite well.
- kazinator 6y agoThe instruments must have been overpriced. You know, I would even pay a bit extra if I could have the instrument in my hand today, and could inspect it myself before paying. But I wouldn't pay that much more. You'd be stupid not to get the instrument over the counter, unless the online deal offers more than a modest discount. Not worth the return headaches if something is wrong: twisted neck, fret being out, bad wiring, cosmetic issue and whatnot. Or is it a choice thing? People try in the store, but get something a bit different online, like a very similar model that the store didn't have?
- sounds 6y agoOne more anecdote to back up kazinator here. I chose to buy from Guitar Center when I made my thousand-dollar purchase. And yes, the sales staff were difficult to work with, but I kept my receipt and when, two days later, I found an obvious defect, I was able to walk back into the store and get a replacement. I was happy to pay a little extra up front because I was able to take the instrument out and actually use it before buying. (And I was able to bring it right back two days after I bought it.) It was well worth the slight surcharge to be able to inspect it before buying. I wonder what my "extended warranty" means after the company is out of business? I'm pretty sure it's not worth the paper it was printed on.
- rossjudson 6y agoI've spent a few thousand at Guitar Center on stuff for my kids, over the past two years. I always liked it. I don't want to order large things (like electric pianos) from sketchy online places. Guitar Center's pricing was always "good enough" for me, and being able to return the wrong thing and pick up the right thing in a single trip is really worth a lot.
- tinyhouse 6y agoSo they continue operation as usual? I don't understand this chapter 11 thing. Also read this week that Norwegian Airlines applied for something similar but continue operating. Can someone explain how come companies can file for bunkruptcy but continue operations?
- titanomachy 6y agoWhen a company files Chapter 11 bankruptcy, they acknowledge that they are unable to pay their debts under their current structure. They propose a plan to pay off their debts which the courts (and possibly their creditors?) must approve. Usually the company is more valuable as an operating business and has a better chance of paying off its debts that way, so it's in everyone's interest for the company to keep operating. The creditors get some say in how the company is run at this point, though, and they may demand that the company sell off some assets to help pay the debt. https://www.investopedia.com/terms/c/chapter11.asp https://www.investopedia.com/terms/c/chapter11.asp
- xster 6y agoWhat about consumers they owe money to? Are they "creditors"? e.g. if you had "credits" from prepaid lessons, gift cards, sold gear etc, can you not get money back from them anymore until all their other creditors split the new loot first?
- bluGill 6y agoYou can in theory, but compared to the millions owed in total you are nothing.
- titanomachy 6y agoSince the company is still operating, they should still be able to provide the services that you’ve paid for so they haven’t breached their contract with you yet.
- chihuahua 6y agoBankruptcy is a legal status/process for handling a situation where a business is about to run out of money. The purpose of this process is to save the business, so that creditors can receive what the business owes them, and to prevent unnecessary harm due to chaos that might erupt. So in a way it's the opposite of a situation where the business just stops operating immediately. In a successful chapter 11 bankruptcy, several parties lose some money, but the business survives and can continue operating. That's the goal and purpose of why "chapter 11" exists in the first place.
- rc_mob 6y agoMaybe small music stores will return?? Guitar center was always junk.
- alisonkisk 6y agoI doubt that GC went bankrupt because small stores are more sustainable. It's Baumol's Cost Disease. The 99% can't afford small stores anymore.
- lotsofpulp 6y agoBaumol’s cost disease doesn’t make sense to me here (which I don’t quite get anyway, it just seems like as the supply of labor relative to demand gets smaller, the price of labor rises). What makes more sense to me is that people are earning less (in real terms), and/or have less income security due to cheaper labor from abroad and productivity improvements from automation all flowing to owners. If people’s wages did increase, they could also be allocating less of their money for leisure purposes, opting instead to prepare themselves for healthcare expense or income instability, or saving for education so their kids can competes. Either way, it’s a reduction in funds available for leisure.
- w0mbat 6y agoAnother case of Bain Capital destroying a useful store chain, like they did with Toys R Us.
- ChickeNES 6y agoThis has nothing to do with Bain and everything to do with retail sales being down due to COVID-19. Besides, Bain doesn't even have a controlling interest in Guitar Center anymore, they sold their controlling interest to a company called Ares Management in 2014.
- thrwn_frthr_awy 6y agoMy issue with Guitar Center was I didn’t want to negotiate to buy my music equipment. It didn’t make it a pleasing experience for me.
- woah 6y agoDidn't they get rid of negotiation like at least 10 years ago?
- thrwn_frthr_awy 6y agoI don’t know I stopped going there about 15 years ago.
- Animats 6y agoIt's just a Chapter 11 restructuring, not a liquidation.
- EdgarVerona 6y ago"The company in a court filing said it has between $1 billion and $10 billion of both assets and liabilities." Is it just me, or does this seem like a pretty wide estimate range?
- jagged-chisel 6y agoBah, it's just an order of magnitude.
- asdff 6y agoThat's just the price they give you for your gear vs. the price they mark it up when they put it out on the floor
- tsjq 6y agoThis was predicted by HN when some money-hungry asset-stripping business acquired them recently
- franksvalli 6y agoThe Amazon effect, which I am guilty of supporting. I walked into a Guitar Center earlier this year and tried out some of their cheaper nylon acoustic models, but wanted to splurge on a big higher quality model, none of which they had in-store. They said they'd have to custom-order it. At that point it was easier just to order from Amazon and deliver to my address... which I did (ended up being shipped from a store in Chicago which listed on Amazon).
- wyclif 6y agoI'm a Fender electric guitar guy (Telecasters, Stratocasters, Jazzmasters, Jaguars). Fender has really ramped up their mail order and online business plus customer service. So why should I go into GC where the available model choices are slim, or they have floor models that have been flogged to death with 'Stairway to Heaven' when I can order exactly what I want right off the production line at Fender and get it delivered to my door and can return it if there's any issues?
- olivermarks 6y agoI love strats, but you have to play 15 new ones to find a good one in a music store, buying mail order is pretty hit or miss. same with wood on a coarser level - I had to sort through a lot of lumber at our local yard to find the straight pieces with no blemishes, bits missing etc. you'd think musical instruments above all else would be a key retail buy, it's amazing how badly GC missed the target on this. 'Tryable' retail stock levels are hitting a point of no return in multiple market segments right now, ugly situation
- wyclif 6y agoThat's right, nothing can replace trying the guitars in the store, aka "showrooming." You have to sort through a lot of Strats to find the right one.
- warent 6y agoThis doesnt surprise me in the least. Their online shopping platform is a joke. I've had multiple bad experiences, and I'll give you one as an example. I ordered an XLR cable from their website and went to pick it up at the store in person. When I arrived, it took about 10 minutes before someone could help me, then they spent several minutes finding someone who could get the cable. That person then walked past a wall of XLR cables for sale, into a back room. I asked "cant we just grab one off that wall?" Nope. Another 20 minutes go by, and the person returns from the back of the store with a cable, and several sheets of paper. This next part is going to sound like a joke from the hitchhiker's guide from the galaxy but it's very real: they then had to run my card to ensure I was the buyer; I had to sign two forms; and finally I had to have a third form stamped twice. All for a $20 cable. Guitar Center was cool for browsing in person. Beyond that? Trash. Bankruptcy makes perfect sense.
- mirkules 6y agoFrom my own recent experience, I ended up buying a Fender Strat HM (the yellow one), during the early days of the pandemic. First, their physical store - for where I bought the guitar for pickup - didn’t have a record of my purchase. So they had to reverse my charge, then charge me again on the spot so I could take it home. Second, I got it home, and it was all sorts of wrong. Every single fret had buzz, the neck was warped, and while the guitar “felt” great, it just wasn’t playable especially for a $1300 guitar. I had no choice but to return it. Then I went to Sweetwater. Completely opposite experience. I ended up buying a 7-string Ibanez RG752M (again, the yellow one), sight unseen. The customer service was absolutely stellar, I got phone calls from two people asking me how and when I’d like to receive it, etc. The guitar came completely and properly set up, ready to play. Sweetwater has a 50-something point setup for all guitars over like $300. No wonder GC is going under.
- asdff 6y agoI called guitar center a couple months ago about a potential repair job and the guitar center tech flat out just recommended a great local shop to take my business to instead. "If you come here you will get the work around"
- stevenicr 6y agoSadly, two days ago I clicked to unsubscribe from emails from them. It was just too many the past month or so - I{ hate when companies come off that desperate - and I never know who to blame. It's funny that in Music City, the Guitar Center is one of the few places to actually go and get a selection of gear. I know there are a couple of small places and of course pawn shops and one used gear place that's been around a while, but we have lost places over the years that used to offer equipment and lighting. Guitar Center has been the go-to place for me and many others for years - glad their newish store opened when and where it did. If they close that store, we'll need something new to pop in and fill the void for sure.
- Guffton 6y agoAre they restructuring? Are they just bad at business? Some guitar manufacturers are doing really well [1] so it's weird that this is happening. [1]] https://www.guitarworld.com/news/fender-has-sold-more-guitars-in-2020-than-any-other-year-in-its-history https://www.guitarworld.com/news/fender-has-sold-more-guitar...
- carldaddy 6y agoI'm just glad to see there are so many fellow guitar players on HN.
- racl101 6y agoI will say this. I've gone to a guitar store, not unlike Guitar center, a couple of times with a friend who was interested in getting into it. The salesperson was interested in selling an expensive ass guitar to a beginner and less interested with her concerns as a beginner. She felt very uneasy about the whole thing. Luckily she found a smaller teaching school where the sales person was more personable and even helped her find a nice used guitar at a reasonable price and she took the time to talk to her about how to go about beginning. My point being: when some of the big guitar stores have a reputation of having people try push and rush to sell you expensive stuff and, also, chastise and sometimes even mock people trying out instruments. Then it's no wonder people would go elsewhere to look for instruments, even online. At least they can take the time and get comfortable and compare even though they can't hold the instrument.