Guitar Center

The Death of the Electric Guitar (Slight Return)

Last summer I wrote this fine article on the DEATH OF THE ELECTRIC GUITAR because it was a terrifying, tumultuously timely story, affecting every guitarist in the land, right? Well, kind of, sort of, I guess. I wasn’t sure then, I’m less sure now. Would you like to know my thought process and the various bits of info I have gathered on the subject? Well, you might want to read the original article first, but if you already have (or in your head said “Go eff yourself, I don’t need to do that!”) away we go:

In the original article I tried to point out that many of these articles want to go all DOOMPORN as if the end of a few companies equals the end of rock and roll, the end of music…or the end of the world! It begs the question: Will Alex Jones be commenting on this issue at some point in the near future? Will the collapse lead to the Zombie hordes taking over or everyone living like the Road Warrior? I don’t think Guitar Center going out of business (if that happens) will lead to the end of the world, but WHAT IF? Can’t we just go back to the days when millions of dudes “rocked out” and everybody listened to the cutting-edge, magically sublime sound that was Warrant? I wish we could, but there is lots to talk about, like…

The other issue(s) that I explored rather humorously in the original post were a) how lack of “live” heroes equaled huge loss in revenues for the guitar industry (so let’s use holograms), and b) how Guitar Center and that model of business never resonated with me and finally c) maybe the finance guys and the people writing these articles are kind of full of poop. Well I’ve got new information man…certain things has come to light… In just the past few months there have been articles further detailing the plight of Gibson and Guitar Center. On May 1st Gibson filed for bankruptcy protection, which includes:

The change in control will give noteholders equity in a new company, replacing stockholders including Chief Executive Officer Henry Juszkiewicz, who owns 36 percent of the company, according to the filing. Those noteholders include Silver Point Capital, Melody Capital Partners LP, and funds affiliated with KKR Credit Advisors. Juszkiewicz and company president David Berryman will continue with the company upon emergence from Chapter 11 “to facilitate a smooth transition during this change of control transaction and to support the Company in realizing future value from its core business,” according to the announcement.

Doesn’t the language in that paragraph make you want to staple your face to your jacket lapel? Me, I’m to-ta-lly convinced turning Gibson Guitar over to companies named stuff like Silver Point Capital is just going to make everything crackerjack okay-fine. I’m not the most brilliant financial mind going, but according to Wikipedia, current CEO of Gibson Brands Henry Juszkiewicz , “acquired Gibson in 1986 for $5m USD with Gary A. Zebrowski and David H. Berryman” and now given that they are looking at about 500 million in debt, I’m going to have to say that financial mismanagement could maybe, probably, be an issue. Either that or somebody sprang for WAAY too many pizza lunches and took WAAY too many cabs to work. Also, as of 6/23/18 this was posted on his Wikipage: Juszkiewicz poor management of Gibson has caused a steady decline in the company, eventually leading to the company filing for chapter 11 bankruptcy in May of 2018. (Holy Glass Ceiling Batman!). Then… there is the Guitar Center saga. A few years ago, Bain Capital (you know that name because Mitt Romney), invested heavily in Guitar Center and they also invested heavily in Toys R Us…that iconic toy brand that just closed all 730 of it’s domestic stores.

WHOOOPS!

In this article, titled Bain Capital Sees Three Investments Stumble, we see what is typically called…I think, bullshit? Right? Right? Because having one company that you are heavily invested in close ALL of its domestic stores sounds more like a full-on face-plant, not a… “stumble”. The other company, Guitar Center, is currently “stumbling” with one billion dollars in debt. *Breathtaking*. Of course Gibson and Guitar Center’s fortunes are intertwined and both companies need people to buy, buy, buy guitars if they are going to reduce their debt loads. So, while a lower number of people buying Gibon guitars at Guitar Center is not a good sign in general, it’s an even worse sign now…because DEBT.

But, of course, the finance guys never admit they messed up. Slow sales is all your going to hear and that isn’t any surprise. Another factor is there are a lot of old people involved in the conversation and you know Old People — They are ANNOYING! Back in the day they were easy to avoid; you didn’t visit except on Thanksgiving. But now old people in the form of so called “music gurus” are weighing in on the fortunes of these companies and it’s a whole lot of LOL. Are these guys genuinely clueless, too old to keep up, or are they full of it because they are heavily invested in the industry mantra that it wasn’t financial mismanagement… it was the lack of new guitar heroes? Let’s go to some quotes and you be the judge:

I would be hard-pressed to name any new ones,” (guitar heroes) George Gruhn, owner of the Gruhn Guitars shop in Nashville, told the Daily News. “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.”

Gruhn was quoted in my original article and he seems to be the go-to guy for all of these articles. Question: Why mention Clapton? He is 73 years old. People who are 73 shouldn’t be expected to drive youth trends and young people are not going to emulate 73 year olds in 2018. This is not rocket surgery. Personally, I don’t believe Eric Clapton “sold” a lot of guitars to players from the late-80s until now just like I don’t believe Lou Reed sold very many Shure microphones, even though here is an ad that features him trying to do just that. Speaking of Lou, did you know he had a mullet at one point? I had kind of forgotten that. That is a mighty fine mullet. Can’t we just return to the good old days of Lou Reed: The Mullet Years? Actually, no we can’t because George has more to say: Here is another quote from George that makes you wonder if he ever heard the term “cognitive-dissonance”:

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,” Gruhn added. “This doesn’t mean that guitar sales are dying, but instrument sales in general are under stress.”

He continues:

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.”

Not so fast says Andy Mooney, CEO of Fender Instruments:

Sales of fretted instruments are in great shape and Fender’s electric guitar and amp revenues have been steadily rising for several years,” he said…“electric sales are holding steady, acoustic sales are on the rise, and ukelele sales are exploding.”

MY GOD!! EXPLODING UKELELE SALES! Take that George Gruhn, guy who probably slaps a Trucoat® finish on the instruments you sell. Maybe it’s my mistake for taking these guys seriously. They are being ironic? sarcastic? with all of these articles saying “WE NEED A NEW GUITAR HERO”. What they really mean is “HOLY SHIT WE ARE SO FUCKED!” Because if manufacturers have been cranking guitars out at that volume for years, and you factor in all of the used electric instruments from the 50s through today currently available, PLUS all of the instruments Baby Boomers are dumping (and want to dump) on the market, at what point does every American family need to have 12 kids just to give every electric guitar a home? I don’t think Eric Clapton can fix this! Through the years I think I had 22 string instruments and I only ever bought 4 brand new ones and I started buying in the 70s. Since I have known a lot of guitar players over the years I can say with confidence that my experience isn’t unique. So, in addition to financial mismanagement, a completely over-saturated market (which I alluded to in the original piece) is also a component to this tragedy.

Another interesting aspect to this Los Angeles Times article that wants to address “changing tastes” is the very predictable notion that the solution to too big to fail is…more too big to fail. There’s a three-step progression at work here that’s pretty insidious, unless you find it hilarious; the two emotions are not necessary mutually exclusive. The first step are the sellers with the Muh Generation bullshit. The second step is that this generation can’t do it on it’s own and this is articulated by one Louie Concotilli, owner of Mugzey Music:

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. “…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.”

Who else is sick of these friggin’ kids at this point? Bunch of lame-bodies for sure. Not only does this generation (unlike prior generations) need guidance and help learning, but they also need A BIG FRIGGIN KICK UP THE ASS SO THEY DO THE WORK! So here we reach the third step. A solution in the form of a chain, courtesy of Corporate America:

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. Elliot 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.

Right…because a chain of 207 music schools is how all of those Baby Boomers, including Eric Clapton, learned how to play. Because no one learns on YouTube, where a search for “Guitar Lessons” pulls up 14 million results and where some instructors (including some I list on this blog) have upwards of a half-million subscribers. Because on YouTube you can’t ever find that song that you actually want to learn, even though it’s designed to be user-driven. Because you need a chain of two-hundred+ schools to teach people music and that’s a bright spot in the industry. I believe that the guy mostly responsible for guitar sales in the Golden Age (the 80s) was Van Halen, not Eric Clapton, although curiously Edward is never mentioned as a driver of guitar sales in these articles. When he and his band came on the scene in 1978 he was playing a piece of crap guitar with one pickup and one knob that he built himself. The industry responded by building and selling a whole bunch of guitars patterned on his design. “The industry,” even when it tries to sell the idea that it “leads,” usually “responds”. Maybe they could respond by doing something else Edward Van Halen did. He donated a whole bunch of his guitars to low-income schools so young people who might not have the finances or exposure in their home have a chance at learning how to play the instrument. If every school in America had some guitars in it that would certainly get rid of a whole lot of inventory, wouldn’t it? That would also get rid of the problem of “nobody” playing guitar. Don’t I have great ideas? They should give me a cabinet position in Washington!

All kidding aside — and that was a lot of kidding you just read through (whew!) — I’m not disputing the charge that fewer guitars have been sold in the past ten years (to 2008), but I don’t think you can directly relate that to whether less people play guitar, especially world-wide. It would be really interesting to see industry sales stats going back to the 1950s when rock n’ roll exploded! I’m not the only person who is cognizant of the fact that instrument sales probably were not a straight-line increase from the time the Les Paul came on the market until 2008 when sales (at least as far as the data we can see) started slipping. If you’ve been around long enough you certainly remember companies and guitar models from back in the day that have no sales stats today because they haven’t existed for a long time. Who buys a Mouse Amp these days? Do you remember the Aria Pro II? That company still exists! See, how bad can things really be then? I believe there have been these peaks and valleys throughout the past half-century, and would be very surprised if there were not some very slow sales in the late 70s and late 90s too. It’s the nature of the world we live in that there are cycles and changes. There have always been people who have tried to make people aware of these facts and what the future might portend and a few of these people were quite famous, including The Geico Caveman…no seriously…David Bowie.

Around the 1:45 mark he talks about brands and subgroups and genres and how the music business has fractured from where it was in the 60s and 70s when definite BIG artists and one or two different ways of doing things were the rule. In the 70s if someone wanted to play music there were limited options compared to now. Of course the business behind those limited options was HUGE because everyone had just those choices, but a whole lot of people wanted to be in the business. Obviously a whole lot of people still want to be in the music and entertainment business, but today there are many more ways to go about that. Saying Eric Clapton over and over again is not going to solve any of the current problems and may in fact be part of the reason these problems arose in the first place. Remember…there were plenty of people who worked at record companies in the 1990s saying “Ho ho ho FILE SHARING is nothing to worry about!” But those people don’t exist anymore. Gene Simmons killed them. So you see…adapting is very important.

The fact is, there are guitar heroes out there who aren’t household names like Clapton or Van Halen, yet they influence people through the magic of their talent, presence and music. Gypsy Jazz players I have written about on this blog, Stochelo Rosenberg and Stephane Wrembel, to name just two, are the reason I bought a new guitar a few years ago. Just have a look at all of these other people and their guitars that they had to buy from somebody because it’s pretty hard to make a Selmer-Maccaferri type guitar on your own. (Although some can people do it). Gypsy Jazz wasn’t even really a genre of music until the 1990s and now people spend some serious coin on guitars and all manner of peripheral equipment so they can go out and get their swing on. I mention this genre because I know something about it. There are many other genres and sub-genres out there (just like Bowie said there would be) that I know nothing about because I’m old or haven’t been exposed to them. The Gypsy Jazzers are not going to get Guitar Center out of trouble, and neither will the players in these other smaller genres, but they certainly make it possible for other people to have a business and make a living. That’s the way it is, that’s the way it has always been! God Bless America! It’s not all about the numbers! It should be about the quality and creative solutions, because they are out there. If I can think of a few, you know there are plenty more. If not, there is always 2112!

Guitar Center Employees Represent!

ABOUT three months ago I wrote a post on Guitar Center and how their business model and the way they treat their employees sucks. I mentioned that the company had been bought by Bain Capital who are known for their aggressive corporate tactics. Bain Capital, as you may recall, was a topic of some intense conversation in the last big election because Mitt Rommey was/is/will be/might be associated with the company.

Now The Guitar Center Employees of New York City and others throughout the company are trying to UNITE for better pay and working conditions. They have a petition and a statement of intent HERE that looks like it might be taking off. Very Interesting…

GUITAR CENTER ≠ GUITAR HERO

I just found, thanks to a friend on Facebook, an interesting article on GUITAR CENTER, written by a fellow WordPress Blogger. Although it’s a month old and is written from a drummer’s point of view, I think guitarists will be interested and maybe can relate. It confirms what I’ve heard from other sources over the years. WordPress has a REPOST feature that allows bloggers to publish another blogger’s efforts basically as is, but I don’t dig that concept very much (even though people have done it to me), so just follow the link below.

why i won’t be working at guitar center

The author provides a personal account of his experiences with of some of Guitar Center’s business practices. Guitar Center is a company that started from very humble beginnings back in 1959, but is now the largest musical instrument chain in the world. They also own Musicians Friend and Harmony Central, among others. So they are now basically the WALMART of musical instruments. Awesome. Also they have connections to Bain Capital and Goldman Sachs (never a good sign) —

“On June 27, 2007, Guitar Center agreed to $1.9 billion buyout from Bain Capital, totaling $2.1 billion including debt. The deal was led by Goldman Sachs and amounted to a per-share price of $63, or a 26% premium on the June 26 closing price. The deal was approved by shareholders on September 18, 2007, and closed October 9, 2007

http://online.wsj.com/article/SB118294460997949913.html?mod=googlenews_wsj

I realize that most people don’t want to think about stuff like this when they need a set of strings for a gig or a new phase shifter for the space rock song they just wrote. I’m also totally aware that there are plenty of good people who work at Guitar Center, while some independent stores are staffed by complete schmucks. But I can’t say GC is a place I go to on a regular basis because…well, it sucks. I tried…I did make an effort, but it’s not my idea of a positive business or shopping experience.